Abstract
We consider a general model of pure exchange economies with consumption externalities. Households may have different consumption sets and each consumption set is described by a function called the possibility function. Utility and possibility functions depend on the consumptions of all households. Showing by means of an example that basic assumptions are not enough to guarantee generic regularity, we provide sufficient conditions for generic regularity in the space of endowments and possibility functions.
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A la mémoire de Dave Cass.
We are deeply indebted to Andreu Mas-Colell for many precious and stimulating discussions, while Elena L. del Mercato was invited as visiting scholar to Department of Economics and Business, Universitat Pompeu Fabra. We wish to thank Paolo Siconolfi and Monique Florenzano for much encouragement and advice. Presented at the SAET Conference (2007), at the Conference on Economic Theory, University of Kansas (2007), and at the 4th Annual CARESS-Cowles Conference on General Equilibrium and Its Applications, University of Pennsylvania (2008), this version of the paper has also benefited from the comments of these audiences. We also thank two anonymous referees for their valuable remarks.
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Bonnisseau, JM., del Mercato, E.L. Externalities, consumption constraints and regular economies. Econ Theory 44, 123–147 (2010). https://doi.org/10.1007/s00199-009-0464-y
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DOI: https://doi.org/10.1007/s00199-009-0464-y