Abstract
We show that in a (finite) neoclassical pure exchange economy (with a weaker monotonicity condition than the usual one): if the number of traders of each type is the same and every type has a corner on one of the commodities, then the set of all symmetric Pareto-optimal allocations in the economy (i.e., Pareto-optimal allocations which assign indifferent commodity bundles to traders of the same type) is a von Neumann-Morgenstern stable set. Moreover, this is the unique stable set of symmetric allocations. A similar result holds in atomless economies with a finite number of types without the convexity assumption on the preference relations. It is also not necessary to assume (in the atomless case) that the members of the types' partition have the same measure.
Original language | English |
---|---|
Pages (from-to) | 28-43 |
Number of pages | 16 |
Journal | Games and Economic Behavior |
Volume | 43 |
Issue number | 1 |
DOIs | |
State | Published - Apr 2003 |
Keywords
- Pareto-optimal allocation
- Stable sets
- Symmetric allocation
ASJC Scopus subject areas
- Finance
- Economics and Econometrics