Abstract
The standard Arrow-Debreu-MacKenzie general equilibrium model provides a basic tool for the understanding of the functioning of competitive markets. It allows us to give a positive answer to the old question concerning the capability of prices and markets to coordinate the economic activity in a decentralized framework. This model shows that, under a set of well specified assumptions, markets are in themselves sufficient institutions for the efficient allocation of resources. This may be called the invisible Hand Theorem, and summarizes the most relevant features of competitive markets: the equilibria constitute a nonempty subset of the set of efficient allocations.
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© 1992 Springer-Verlag Berlin Heidelberg
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Villar, A. (1992). Market Equilibrium with Nonconvex Technologies. In: Operator Theorems with Applications to Distributive Problems and Equilibrium Models. Lecture Notes in Economics and Mathematical Systems, vol 377. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45711-1_4
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DOI: https://doi.org/10.1007/978-3-642-45711-1_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-55087-7
Online ISBN: 978-3-642-45711-1
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