Abstract
We investigate how the presence of bads, causing disutility to consumers, affects the emergence of the price-taking behavior. Specifically, we give two examples of sequences of increasingly populous finite economies in which the core convergence property holds and, yet, for which there is a sequence of coalitions, one from each economy, such that the size of the coalition relative to the economy converges to zero but the share of the coalition in the aggregate consumption of bads converges to one. The limit atomless economy has a Walrasian equilibrium in one of the two examples but not in the other.
This paper combines materials in an earlier paper of the same title and another paper entitled “Example on the Core Convergence Property with Bads”. I am grateful to Tomoki Inoue, Atsushi Kajii, and an anonymous referee for extremely valuable comments on an earlier version of this paper.
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Hara, C. (2008). Core convergence in economies with bads. In: Kusuoka, S., Yamazaki, A. (eds) Advances in Mathematical Economics Volume 11. Advances in Mathematical Economics, vol 11. Springer, Tokyo. https://doi.org/10.1007/978-4-431-77784-7_3
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DOI: https://doi.org/10.1007/978-4-431-77784-7_3
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