Edgeworth Box Economies with Multiple Equilibria
Economic Theory Bulletin, April 2017, Volume 5, Issue 1, pp 65-80
14 Pages Posted: 8 Jun 2016 Last revised: 29 Mar 2017
Date Written: June 7, 2016
We derive sufficient conditions for the existence of multiple equilibria in two-good, two-agent pure exchange economies with heterogeneous but symmetric preferences with identical Bernoulli utilities. When preferences are non-homothetic (e.g., quadratic, quasi-linear, or HARA), multiple equilibria are possible even with identical endowments.
Keywords: excess demand functions, multiple equilibria
JEL Classification: C62, D51, D58
Suggested Citation: Suggested Citation