Equivalence of the Aubin bargaining set and the set of competitive equilibria in a finite coalition production economy
Document Type
Article
Publication Date
2017
Department/School
Mathematics
Publication Title
Journal of Mathematical Economics
Abstract
Mas-Colell (Mas-Colell, 1989) proved that the bargaining set and the set of competitive allocations coincide in an exchange economy with a continuum of traders under some standard assumptions. In the case of pure exchange economies with a finite number of traders it is well-known that the set of competitive allocations could be a strict subset of the core which can also be a strict subset of the bargaining set. In this paper, we show that the Aubin bargaining set (or fuzzy bargaining set) and the set of competitive allocations coincide in a finite coalition production economy under some standard assumptions. We also show that the (Mas-Colell) bargaining set shrinks to the set of competitive allocations in a finite coalition production economy under some standard conditions when is replicated. As a consequence, the existence of competitive equilibrium in a finite coalition production economy implies the nonemptiness of Aubin bargaining sets.
Link to Published Version
Recommended Citation
Liu, J. (2017). Equivalence of the Aubin bargaining set and the set of competitive equilibria in a finite coalition production economy. Journal of Mathematical Economics, 68, 55-61. https://doi.org/10.1016/j.jmateco.2016.11.003