Equilibrium in a Production Economy

Journal Article · Wed Jun 15 00:00:00 EDT 2011 · Applied Mathematics and Optimization

DOI:https://doi.org/10.1007/S00245-010-9128-3· OSTI ID:22043922

Chiarolla, Maria B., E-mail: [e-mail] ^[1]; Haussmann, Ulrich G., E-mail: [e-mail] ^[2]

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1. Universita di Roma 'La Sapienza', Dipartimento di Metodi e Modelli per l'Economia, il Territorio e la Finanza, Facolta di Economia (Italy)
2. University of British Columbia, Department of Mathematics (Canada)

Consider a closed production-consumption economy with multiple agents and multiple resources. The resources are used to produce the consumption good. The agents derive utility from holding resources as well as consuming the good produced. They aim to maximize their utility while the manager of the production facility aims to maximize profits. With the aid of a representative agent (who has a multivariable utility function) it is shown that an Arrow-Debreu equilibrium exists. In so doing we establish technical results that will be used to solve the stochastic dynamic problem (a case with infinite dimensional commodity space so the General Equilibrium Theory does not apply) elsewhere.

• OSTI ID: 22043922
• Journal Information: Applied Mathematics and Optimization, Vol. 63, Issue 3; Other Information: Copyright (c) 2011 Springer Science+Business Media, LLC; Country of input: International Atomic Energy Agency (IAEA); ISSN 0095-4616
• Country of Publication: United States
• Language: English

Related Subjects

97 MATHEMATICAL METHODS AND COMPUTING
ECONOMY
EQUILIBRIUM
MATHEMATICAL MODELS
MATHEMATICAL SOLUTIONS
MATHEMATICAL SPACE
RESOURCES
STOCHASTIC PROCESSES