Overdemand and Underdemand in Economies with Invisible Goods and Unit Demands

CentER Discussion Paper No. 2006-84

22 Pages Posted: 26 Sep 2006

See all articles by Debasis Mishra

Debasis Mishra

Indian Statistical Institute, New Delhi - Delhi Centre

Dolf Talman

Tilburg University - Department of Econometrics & Operations Research

Date Written: September 2006

Abstract

We study an economy where a collection of indivisible goods are sold to a set of buyers who want to buy at most one good. We characterize the set of Walrasian equilibrium price vectors in such an economy using sets of overdemanded and underdemanded goods. Further, we give characterizations for the minimum and the maximum Walrasian equilibrium price vectors of this economy. As a consequence of these characterizations, we can say if overdemanded sets of goods and underdemanded sets of goods exist at a price vector given its position in the price vector space with respect to the minimum and the maximum Walrasian equilibrium price vectors. We also analyze what happens with the Walrasian equilibrium price vectors if one of the buyers or one of the goods is removed from the economy.

Keywords: invisible goods, Walrasian equilibrium, auctions

JEL Classification: C62, D44, D50

Suggested Citation

Mishra, Debasis and Talman, Dolf J. J., Overdemand and Underdemand in Economies with Invisible Goods and Unit Demands (September 2006). CentER Discussion Paper No. 2006-84, Available at SSRN: https://ssrn.com/abstract=932522 or http://dx.doi.org/10.2139/ssrn.932522

Debasis Mishra (Contact Author)

Indian Statistical Institute, New Delhi - Delhi Centre ( email )

7 S .J. S.
Sansanwal Marg
New Delhi, 110016
India

Dolf J. J. Talman

Tilburg University - Department of Econometrics & Operations Research ( email )

Tilburg, 5000 LE
Netherlands
+31 13 466 2346 (Phone)

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