Restriction of Preferences to the Set of Consumption Bundles, in a Model with Production and Consumption Bundles
CentER Discussion Paper Series No. 1999-89
Posted: 21 Feb 2000
In contrast to the neo-classical theory of Arrow and Debreu, a model of a private ownership economy ispresented, in which production and consumption bundles are treated separately. Each ofthe two types of bundles is assumed to establish a convex cone. Production technologies can convert production bundles into consumption bundles, and the preferences of the consumers are assumed to lie only on the set of consumption bundles. The main theorem of this paper states the existence of a Walrasian equilibrium in this setting.
JEL Classification: C62, C67, D51, D57
Suggested Citation: Suggested Citation