Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/274063 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
Discussion Papers of the Max Planck Institute for Research on Collective Goods No. 2023/5
Publisher: 
Max Planck Institute for Research on Collective Goods, Bonn
Abstract: 
This expository note uses Hilbert's "infinite hotel", a hotel where one can always find place for another guest even if the hotel is already full, to illustrate the failure of the First Welfare Theorem in "large-square" economies that have infinitely many participants as well as infinitely many goods. Hilbert's hotel with infinitely many guests has a similar mathematical structure as the overlapping-generations model of Allais (1947) and Samuelson (1958). The phenomenon of "dynamic inefficiency" in such models represents a failure of the First Welfare Theorem in "large-square" economies, rather than frictions from the sequential nature of markets.
Subjects: 
Hilbert's hotel
overlapping-generations models
dynamic inefficiency
First Welfare Theorem
JEL: 
D15
D61
E62
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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