DEPOCEN Working Paper Series
Nizar Allouch, Cuong Le Van, 2008. "Walras and Dividends Equilibrium With Possibly Satiated Consumers."
Published as:
Nizar Allouch, Cuong Le Van, 2008. Walras and Dividends Equilibrium With Possibly Satiated Consumers., Journal of Mathematical Economics, Volume 44, Issues 9-10, September 2008, Pages 907-918
The main contribution of the paper is to provide a weaker nonsatiation assumption than the one commonly used in the literature to ensure the existence of competitive equilibrium. Our assumption allows for satiation points in the set of individually feasible consump- tions, provided that the consumer has satiation points available to him outside this set. As a result, we show the concept of equilibrium with dividends (See Aumann and Dreze (1986), Mas-Collel (1992)) is pertinent only when the set of satiation points is included in the set of individually feasible consumptions. Our economic motivation stems from the fact that in decentralized markets, increasing the incomes of consumers through dividends, if it is possible, is costly since it involves the intervention of a social planner. Then, we show, in particular, how in securities markets our weak nonsatiation assumption is satisfied by Werner's (1987) assumption.
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