Abstract
This paper introduces the notion of Market Equilibrium With Active Consumers (MEWAC), in order to characterize the efficiency of market outcomes in production economies. We show that, no matter the behaviour followed by the firms, a market equilibrium is efficient if it is a MEWAC. And also that every efficient allocation can be decentralized as a MEWAC in which firms follow the marginal pricing rule.
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Villar, A. On the Efficiency of Market Equilibrium in Production Economies. Journal of Global Optimization 20, 375–389 (2001). https://doi.org/10.1023/A:1017524905536
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DOI: https://doi.org/10.1023/A:1017524905536