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| Author: | Chichilnisky, G. Heal, G. |
| Title: | A unified treatment of finite and infinite economies: limited arbitrage is necessary and sufficient for the existence of equilibrium and the core |
| Journal: | Economic Theory
1998 : VOL. 12:1, p. 163-176 |
| Index terms: | ARBITRATION EQUILIBRIUM ANALYSIS MODELS |
| Language: | eng |
| Abstract: | In the paper, a single condition, limited arbitrage, is shown to be necessary and sufficient for the existence of a competitive equilibrium and the core in economies with any number of finite or infinite markets, with or without short sales. This extends earlier results of Chichilnisky for finite economies. This unification of finite and infinite economies is achieved by proving that in Hilbert spaces limited arbitrage is necessary and sufficient for the compactness of the Pareto frontier. Limited arbitrage has also been shown to be necessary and sufficient for resolution of the social choice paradox. |
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