Robustness of the Uniqueness of Walrasian Equilibrium with Cobb-Douglas Utilities

9 Pages Posted: 2 Nov 2009

See all articles by David Cass (deceased)

David Cass (deceased)

University of Pennsylvania, School of Arts & Sciences, Department of Economics (deceased)

Abhinash Borah

University of Pennsylvania - Department of Economics

Kyungmin Kim

Emory University

Maxym Kryshko

University of Pennsylvania - Department of Economics

Antonio Penta

University of Wisconsin - Madison - Department of Economics

Jonathan Pogach

FDIC, Division of Insurance and Research

Date Written: October 30, 2009

Abstract

The majority of results in the literature on general equilibrium are not for an economy (i.e. given an endowment and preferences), but rather, for a set of economies (i.e. a set of endowments given preferences). Therefore, we argue that the most appropriate robustness result requires perturbing economies uniformly over the space of endowments for which the result is obtained. In this paper, we examine the robustness of the uniqueness of Walrasian endowment economies with Cobb-Douglas utility functions under this interpretation of robustness. Namely, we prove that for economies described by Cobb-Douglas utilities and all endowments in a fixed set, uniqueness of equilibrium is robust to perturbations of the utility functions.

Keywords: Walrasian Equilibrium, Uniqueness, Robustness

JEL Classification: D50, D51

Suggested Citation

Cass (deceased), David and Borah, Abhinash and Kim, Kyungmin and Kryshko, Maxym and Penta, Antonio and Pogach, Jonathan, Robustness of the Uniqueness of Walrasian Equilibrium with Cobb-Douglas Utilities (October 30, 2009). PIER Working Paper No. 09-038, Available at SSRN: https://ssrn.com/abstract=1498596 or http://dx.doi.org/10.2139/ssrn.1498596

David Cass (deceased)

University of Pennsylvania, School of Arts & Sciences, Department of Economics (deceased)

Abhinash Borah

University of Pennsylvania - Department of Economics ( email )

3718 Locust Walk
160 NcNeil Building
Philadelphia, PA 19104
United States
612-701-5822 (Phone)

Kyungmin Kim

Emory University ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

HOME PAGE: http://https://sites.google.com/site/kyungminteddykim/Home

Maxym Kryshko

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
(215) 746-0363 (Phone)

HOME PAGE: http://www.sas.upenn.edu/~mkryshko

Antonio Penta (Contact Author)

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States

Jonathan Pogach

FDIC, Division of Insurance and Research ( email )

550 17th Street NW
Washington, DC 20429
United States

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