Symmetric von Neumann-Morgenstern stable sets in pure exchange economies

Ezra Einy, Benyamin Shitovitz

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

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 languageEnglish
Pages (from-to)28-43
Number of pages16
JournalGames and Economic Behavior
Volume43
Issue number1
DOIs
StatePublished - 1 Jan 2003

Keywords

  • Pareto-optimal allocation
  • Stable sets
  • Symmetric allocation

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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