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Title:Walras and dividends equilibrium with possibly satiated consumers PDF Logo
Authors:Allouch, Nizar
Le Van, Cuong
Issue Date:2006
Series/Report no.:Working Paper, Department of Economics, Queen Mary, University of London 555
Abstract:The main contribution of the paper is to provide a weaker non-satiation assumption than the one commonly used in the literature to ensure the existence of competitive equilibrium. Our assumption allows for satiation points inside the set of individually feasible consumptions, provided that the consumer has satiation points available to him outside this set. As a result, we show the concept of equilibrium with dividends (See Aumann and Dreze (1986), Mas-Collel (1992)) is pertinent only when the set of satiation points is included in the set of individually feasible consumptions. Our economic motivation stems from the fact that in decentralized markets, increasing the incomes of consumers through dividends, if it is possible, is costly since it involves the intervention of a social planner. Then, we show, in particular, how in securities markets our weak nonsatiation assumption is satisfied by Werner's (1987) assumption.
Subjects:Satiation, Dividends, Equilibrium, Exchange Economy, Short-selling
JEL:D51
C71
Document Type:Working Paper
Appears in Collections:Working Paper Series, School of Economics and Finance, Queen Mary, University of London

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