Walrasian Equilibrium in Large, Quasilinear Markets

Abstract

In an economy with indivisible goods, a continuum of agents and quasilinear utility, we show that equilibrium exists regardless of the nature of agents' preferences over bundles. This contrasts with results for economies with a finite number of agents, which require restrictions on preferences (such as substitutability) to guarantee existence. When the distribution of preferences has full support, equilibrium prices are unique.

Available at http://econtheory.org. DOI: 10.3982/TE1060

Keywords: Walrasian equilibrium, quasilinear utility, indivisible goods, continuum economies, complementary preferences

JEL Classification: D51