Summary.
It is shown that core-Walras equivalence fails whenever the commodity space is a non-separable Banach space. The interpretation is that a large number of agents guarantees core-Walras equivalence only if there is actually a large number of agents relative to the size of the commodity space. Otherwise a large number of agents means that agents' characteristics may be extremely dispersed, so that the standard theory of perfect competition fails. Supplementing the core-Walras non-equivalence result, it is shown that in the framework of economies with weakly compact consumption sets – as developed by Khan and Yannelis (1991) – the core is always non-empty, even if consumption sets are non-separable.
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December 12, 2001; revised version: December 6, 2002
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ID="*" Thanks to E. Dierker, M. Nermuth, R. Tourky, and N. C. Yannelis for helpful discussions and suggestions, and thanks to a referee for comments which helped to improve the final version.
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Podczeck, K. Core and Walrasian equilibria when agents' characteristics are extremely dispersed. Econ Theory 22, 699–725 (2003). https://doi.org/10.1007/s00199-002-0354-z
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DOI: https://doi.org/10.1007/s00199-002-0354-z