Bertrand-Edgeworth Equilibria in Finite Exchange Economies

Posted: 26 Jun 2003

See all articles by Fabrizio Germano

Fabrizio Germano

Universitat Pompeu Fabra - Department of Economics and Business

Abstract

We introduce a framework for analyzing Bertrand-Edgeworth equilibria in finite Arrow-Debreu exchange economies. A key feature is the way trade takes place. There are two main stages. In the first stage agents simultaneously choose prices and quantities of commodities they want to sell; in the second stage they enter the markets as buyers, sequentially, and choose quantities of commodities they want to buy. We view the framework as providing a realistic, entirely decentralized abstraction of how trade occurs on numerous markets, especially for consumer goods and services, and show that resulting equilibria are Walrasian if and only if initial endowments are already Pareto efficient allocations. Many examples are also considered.

JEL Classification: C72, C73, D43, D51, D61

Suggested Citation

Germano, Fabrizio, Bertrand-Edgeworth Equilibria in Finite Exchange Economies. Available at SSRN: https://ssrn.com/abstract=419469

Fabrizio Germano (Contact Author)

Universitat Pompeu Fabra - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34-93-542-2729 (Phone)
+34-93-542-1746 (Fax)

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