SFB 303 Discussion Paper No. A - 293

Author: Brown, Donald
Title: Equilibrium Analysis with Nonconvex Technologies
Abstract: The basic properties of the classical Arrow-Debreu model of a Walrasian economy consist of the existence of competitive equilibria; the first and second welfare theorems; the computation of equilibria; and the local uniqueness and finiteness of equilibria. This paper surveys the implications of nonconvex technologies for each of these properties in general equilibrium models, where the behavior of firms with nonconvex production sets is characterized by pricing rules such as marginal cost pricing, average cost pricing, and two-part tariffs.
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Creation-Date: May 1990
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