Abstract
Recent results, establishing evidence of intractability for such restrictive utility functions as additively separable, piecewise-linear and concave, under both Fisher and Arrow-Debreu market models, have prompted the question of whether we have failed to capture some essential elements of real markets, which seem to do a good job of finding prices that maintain parity between supply and demand.
The main point of this paper is to show that even non-separable, quasiconcave utility functions can be handled efficiently in a suitably chosen, though natural, realistic and useful, market model; our model allows for perfect price discrimination. Our model supports unique equilibrium prices and, for the restriction to concave utilities, satisfies both welfare theorems.
Research supported by NSF Grants CCF-0728640 and CCF-0914732, ONR Grant N000140910755, and a Google Research Grant.
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Vazirani, V.V. (2010). Non-separable, Quasiconcave Utilities are Easy – in a Perfect Price Discrimination Market Model (Extended Abstract). In: Saberi, A. (eds) Internet and Network Economics. WINE 2010. Lecture Notes in Computer Science, vol 6484. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-17572-5_51
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DOI: https://doi.org/10.1007/978-3-642-17572-5_51
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