Gross Substitutes and Complements: A Simple Generalization

Economics Letters, 123(2), pp. 135-138.

14 Pages Posted: 19 Jun 2014 Last revised: 21 Jun 2014

Alexander Teytelboym

University of Oxford - Institute for New Economic Thinking at the Oxford Martin School

Date Written: November 30, 2013

Abstract

This paper extends the gross substitutes and complements (GSC) framework of Sun and Yang (2006) to a more general substitutes and complements structure. We show that competitive equilibrium with indivisible goods exists under significantly weaker, easily checkable, and interpretable conditions. We show that the dynamic double-track procedure developed by Sun and Yang (2008, 2009) can be extended to find the competitive equilibrium outcome. We also apply these insights to trading networks.

Keywords: indivisibilities, competitive equilibrium, substitutes, complements, auctions

JEL Classification: D44, D47, D51

Suggested Citation

Teytelboym, Alexander, Gross Substitutes and Complements: A Simple Generalization (November 30, 2013). Economics Letters, 123(2), pp. 135-138.. Available at SSRN: https://ssrn.com/abstract=2456227

Alexander Teytelboym (Contact Author)

University of Oxford - Institute for New Economic Thinking at the Oxford Martin School ( email )

Eagle House
Walton Well Road
Oxford, OX2 6ED
United Kingdom

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