Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312993 
Title (translated): 
Heterogeneous agents under the competitive partial equilibrium approach
Year of Publication: 
2024
Citation: 
[Journal:] Atlantic Review of Economics (ARoEc) [ISSN:] 2174-3835 [Volume:] 7 [Issue:] 1 [Year:] 2024 [Pages:] 1-18
Publisher: 
Colegio de Economistas de A Coruña, A Coruña
Abstract (Translated): 
The objective of the article is to construct a mathematical model of partial equilibrium in competitive markets with heterogeneous economic agents. On one hand, consumers with Cobb - Douglas preferences, perfect substitute goods, quasilinear and Stone - Geary preferences are considered, in addition to incorporating an unequal income distribution. On the other hand, producers are analyzed in terms of diminishing and increasing marginal returns, as well as decreasing, constant, and increasing returns to scale. Th e results are compared with the model of homogeneous agents. The characteristics and advantages of models employing heterogeneous agents are discussed in comparison with models of homogeneous agents. The evolution in the modeling of both types of agents is also addressed. It is concluded that, in a competitive market, the mechanism of flexible prices is crucial for reaching equilibrium, regardless of whether homogeneous or heterogeneous agents are used. However, it is highlighted that changes in preferences , income distribution, as well as the existence of various marginal and scale returns, are determinants of the price and quantity levels that clear the market, with the possibility that when the equilibrium price of good 1 equals the price of good 2, given perfect substitutes preferences, an endogenous disequilibrium situation may arise.
Subjects: 
heterogeneous agents
partial equilibrium
microeconomics
income distribution
JEL: 
D41
D51
L11
Document Type: 
Article

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