The existence and computation of competitive equilibria in markets with an indivisible commodity

Mamoru Kaneko, Yoshitsugu Yamamoto

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36 Citations (Scopus)

Abstract

This paper considers an exchange economy called a generalized assignment market, in which sellers and buyers trade one indivisible commodity possibly with product differentiation for a perfectly divisible commodity. The existence of a competitive equilibrium in this economy is proved using Kakutani's fixed point theorem. This existence theorem is applied to a production economy in which sellers are formulated as producers with convex cost functions. Two examples of housing markets are provided and their competitive equilibria are numerically calculated.

Original languageEnglish
Pages (from-to)118-136
Number of pages19
JournalJournal of Economic Theory
Volume38
Issue number1
DOIs
Publication statusPublished - 1986
Externally publishedYes

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ASJC Scopus subject areas

  • Economics and Econometrics

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