The Principles of Individual Exchange

Abstract

In the previous chapters we have introduced the building blocks for the description and analysis of Edgeworthian barter processes through the medium of trade coalitions. For that purpose we introduced the primitive notions of an economic agent, an economic commodity, and a primitive (trade) coalition. In Definition 2.3.1 we completed our initial setup by introducing the notion of a coalitionally structured exchange system. Such a system is not yet a complete description of an exchange economy since an exchange mechanism is not yet incorporated completely into the description. In this chapter we investigate the simplest possible exchange system, namely that with a finite population of sovereign economic agents. Thus, we look at a system in which a finite number of economic agents are participating and assume that the collection of primitive coalitions is simply the collection of all sovereignly operating individual economic agents.