On the efficiency of market equilibrium in production economies

  1. Villar, Antonio
Revista:
Working papers = Documentos de trabajo: Serie AD

Año de publicación: 2000

Número: 17

Tipo: Documento de Trabajo

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Resumen

This paper introduces the notion of Market Equilibrium With Active Consumers (MEWAC), in order to characterize the efficiency of market outcomes in production economies. We show that, no matter the behaviour followed by the firms, a market equilibrium is efficient if it is a MEWAC. And also that every efficient allocation can be decentralized as a MEWAC in which firms follow the marginal pricing rule.

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