Linear Transformation of Products: Games and Economies
Tilburg University, CentER Discussion Paper Series No. 1998-76
Posted: 27 Sep 1999
Date Written: 1998
In this paper we introduce situations involving the linear transformation of products, in short: LTP situations. LTP situations are production situations where each producer has a single linear transformation technique. We show that the corresponding LTP games are totally balanced. Next, we relate LTP situations to exchange economies in two different ways and we prove the existence of an equilibrium in these economies. Finally, we extend the LTP situation to one where a producer may have more than one linear transformation technique. We show that each totally balanced game with nonnegative values is an extended LTP game.
JEL Classification: C71
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