An Algebraic Proof of the Existence of a Competitive Equilibrium in Exchange Economies

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DOI: 10.4236/tel.2014.43031    4,235 Downloads   5,535 Views  
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ABSTRACT

The standard excess demand argument for existence of competitive equilibria in exchange economies invokes maximizing the market value of the aggregate excess demand function and thereby adjusting the prices toward equilibrium. By exploiting the Perron-Frobenius theorem on stochastic matrices, we offer an algebraic proof of the existence of a competitive equilibrium without resorting to such a device of excess demand.

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Sun, G. (2014) An Algebraic Proof of the Existence of a Competitive Equilibrium in Exchange Economies. Theoretical Economics Letters, 4, 232-234. doi: 10.4236/tel.2014.43031.

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