Summary.
It has long been known that in economies with satiation, the set of competitive equilibria does not coincide with the limiting core of an economy. In dividend equilibria, introduced independently by a number of authors, the budget excess is allowed to be divided among consumers as dividends and equilibrium existence is restored. In this paper a new notion of blocking which leads to core - dividend equilibrium equivalence is introduced. Specifically, it is shown that an allocation is a dividend equilibrium if and only if a corresponding equal treatment allocation of a large economy is in the core.
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Received: 21 June 2003, Revised: 3 December 2003,
JEL Classification Numbers:
D50.
Alexander Konovalov: The author would like to thank M. Florig, P. J. J. Herings, V. Marakulin, D. Talman, V. Vasil’ev, and anonymous referees for helpful comments and suggestions.
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Konovalov, A. The core of an economy with satiation. Economic Theory 25, 711–719 (2005). https://doi.org/10.1007/s00199-003-0462-4
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DOI: https://doi.org/10.1007/s00199-003-0462-4