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Economic Theory

, Volume 21, Issue 4, pp 907–912 | Cite as

Probability of survival in a random exchange economy with dependent agents

  • Nigar Hashimzade
Exposita Note
  • 61 Downloads

Summary.

In this paper I analyze the general equilibrium in a random Walrasian economy. Dependence among agents is introduced in the form of dependency neighborhoods. Under the uncertainty, an agent may fail to survive due to a meager endowment in a particular state (direct effect), as well as due to unfavorable equilibrium price system at which the value of the endowment falls short of the minimum needed for survival (indirect terms-of-trade effect). To illustrate the main result I compute the stochastic limit of equilibrium price and probability of survival of an agent in a large Cobb-Douglas economy.

Keywords and Phrases: General equilibrium, Random endowments and preferences. 
JEL Classification Numbers: D50, D80. 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2003

Authors and Affiliations

  • Nigar Hashimzade
    • 1
  1. 1.Department of Economics, Cornell University, Ithaca, NY 14853, USA (e-mail: nfh1@cornell.edu) US

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