Abstract
The simplest model of a productive economy is based on the following assumptions: agents live only for one period, they take input and output prices as given, and production involves no risks.
I am much indebted to J. H. Drèze for suggesting many improvements. I wish to thank K. J. Arrow, R. Guesnerie, A. Kirman, M. Marchand and J. E. Stiglitz for helpful discussions. I alone am responsible for any remaining errors. A preliminary version of part of this paper was presented at the European Research Conference on Economy Theory sponsored by the IEA, Bergen, summer 1971. Part of this research was carried out while the author was associated with the Center for Operations Research and Econometrics, Louvain, Financial support of the Fonds de la Recherche Fondamentale Collective (under contract 611) is gratefully acknowledged.
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K. J. Arrow, ‘Political and Economic Evaluation of Social Effects and Externalities’, pp. 1–23 in J. Margolis (ed.), The Analysis of Public Output (NBER, New York: Columbia University Press, 1970).
K. J. Arrow and F. H. Hahn, General Competitive Analysis (San Francisco: Holden-Day, 1971).
D. Black, The Theory of Committees and Elections (Cambridge: Cambridge University Press, 1958).
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P. A. Diamond, ‘The Role of a Stock Market in a General Equilibrium Model with Technological Uncertainty’, American Economic Review vol. LVII (1967), pp. 759–76.
J. H. Drèze, ‘A Tâtonnement Process for Investment under Uncertainty in Private Ownership Economies’, pp. 3–23 in Mathematical Methods in Investment and Finance ed. by G. P. Szegö and K. Shell (Amsterdam: North-Holland, 1972).
J. H. Drèze, ‘Investment Under Private Ownership: Optimality, Equilibrium and Stability’, chapter 9 supra.
K. Hamada, ‘A Simple Majority Rule on the Distribution of Income’, Journal of Economic Theory vol. VI (1973), pp. 273–64.
C. R. Plott, ‘A Notion of Equilibrium and its Possibility under Majority Rule’, American Economic Review vol. LVII (1967), pp. 787–806.
D. Sondermann, ‘Temporary Competitive Equilibrium Under Uncertainty’, chapter 13 infra.
J. E. Stiglitz, ‘On the Optimality of the Stock Market Allocation of Investment’, The Quarterly Journal of Economics vol. LXXXVI (1972), pp. 25–60.
O. Williamson, The Economics of Discretionary Behavior: Managerial Objectives in a Theory of the Firm (Englewood Cliffs: Prentice Hall, 1964).
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© 1974 International Economic Association
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Gevers, L. (1974). Competitive Equilibrium of the Stock Exchange and Pareto Efficiency. In: Drèze, J.H. (eds) Allocation under Uncertainty: Equilibrium and Optimality. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-01989-2_10
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