Arbitrage and Global Cones: Another Counterexample

Posted: 3 Mar 1999

See all articles by Paulo Klinger Monteiro

Paulo Klinger Monteiro

Getulio Vargas Foundation (FGV) - EPGE

Frank H. Page

Systemic Risk Centre, LSE; Indiana University, Bloomington - Department of Economics

Myrna H. Wooders

Vanderbilt University - College of Arts and Science - Department of Economics

Abstract

Chichilnisky (1997) claims that another variant of her condition limiting arbitrage is necessary and sufficient for existence of equilibrium and nonemptiness of the core in an economy with short sales allowing half lines in indifference surfaces. Her proof, however, is based on a proposition purporting to relate her notion of "global cone" (see Chichilnisky (1997) for references) to the Page-Wooders "increasing cone." In this paper, we present a counterexample showing that parts (i) and (ii) of Chichilnisky's proposition are false. Thus, Chichilnisky's claimed result is without proof.

JEL Classification: D51, D59

Suggested Citation

Monteiro, Paulo Klinger and Page, Frank H. and Wooders, Myrna H., Arbitrage and Global Cones: Another Counterexample. Social Choice and Welfare, Vol. 16, Iss. 2, January 28, 1999. Available at SSRN: https://ssrn.com/abstract=149135

Paulo Klinger Monteiro (Contact Author)

Getulio Vargas Foundation (FGV) - EPGE ( email )

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Frank H. Page

Systemic Risk Centre, LSE ( email )

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London, WC2A 2AE
United Kingdom

HOME PAGE: http://www.systemicrisk.ac.uk/

Indiana University, Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

Myrna H. Wooders

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States

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