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CAUDEX UNDECIMUS

  • Tönu Puu
Chapter

Abstract

To continue the previous stub, we can also consider increasing the number of commodities. Supposing we still have two traders, what happens is that we need a solid 3D Edgeworth box. The only problems with this are visualization. What we mainly conclude from a 3D picture is that, as the budget constraint is a plane and not a line, we cannot say whether the optima are located on either side or the same side of the initial asset point. However, there are now two relative prices, and we can actually interpret one of the three commodities as numéraire. Then it becomes natural to consider partial deals of any of the two other commodities against the numéraire. It is just a matter of deciding which partial deal is the most advantageous, and to again reduce the problem to one deal of the kind we know how to deal with. At the end of the stub we suggest how to generalize the model to an arbitrary number of commodities and agents.

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Tönu Puu
    • 1
  1. 1.Centre for Regional Science (CERUM)Umeå UniversityUmeåSweden

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