Government and the provision of public goods: from equilibrium models to mechanism design

Focussing on their analysis of the optimal public goods provision problems, this paper follows the parallel development of equilibrium models and mechanism design after the accommodation of Samuelson's definition of collective goods to the general equilibrium framework. Both paradigms lead to the negative conclusion of the impossibility of a fully decentralized optimal public goods provision throught market or market-like institutions.general equilibrium, Lindahl-Foley equilibrium, Wicksell-Foley public competitive equilibrium, private provision equilibrium, mechanism design, free-rider problem, incentive compatibility, principal-agent models

General equilibrium of financial markets

The purpose of this paper is to explain the role of financial assets in allowing individual agents of an economy to make at time 0 some limited commitments into the future which, at some extent, redistribute their revenue among several time periods and different states of the world. It is done studying in different contexts the general equilibrium of a simple two-period exchange model, under weaker assumptions and in a more general setting than the ones usually described in the literature.Several equilibrium existence theorems are stated and proved. Even in this simple framework, they often require a rather sophisticated mathematical background and are of a deep economic significance. Moreover, they are a necessary step towards further developments (including infinite horizon, continuous time, continuum of states of the world, defaut and collateral securities, ...).general equilibrium; incomplete financial markets; arbitrage, numeraire assets; real assets; pseudo-equilibrium

Walras-Lindahl-Wicksell: What equilibrium concept for public goods provision ? I - The convex case

Despite the large number of its references, this paper is less a survey than a systematic exposition, in an unifying framework and assuming convexity as well on the consumption side as on the production side, of the different equilibrium concepts elaborated for studying provision of public goods. As weak as possible conditions for their existence and their optimality properties are proposed. The general conclusion is that the drawbacks of the different equilibrium concepts lead to founding public economic policy either on direct Pareto improving government interventions or on state enforcement of decentralized mechanisms.Private provision equilibrium ; Lindahl-Foley equilibrium ; public competitive equilibrium ; abstract economies ; equilibrium existence ; welfare theorems ; core

General equilibrium

Unlike partial equilibrium analysis which study the equilibrium of a particular market under the clause "ceteris paribus" that revenues and prices on the other markets stay approximately unaffected, the ambition of a general equilibrium model is to analyze the simultaneous equilibrium in all markets of a competitive economy. Definition of the abstract model, some of its basic results and insights are presented. The important issues of uniqueness and local uniqueness of equilibrium are sketched ; they are the condition for a predictive power of the theory and its ability to allow for statics comparisons. Finally, we review the main extensions of the general equilibrium model. Besides the natural extensions to infinitely many commodities and to a continuum of agents, some examples show how economic theory can accommodate the main ideas in order to study some contexts which were not thought of by the initial model.Commodity space, price space, exchange economy, production economy, feasible allocations, equilibrium, quasi-equilibrium, Pareto optimum, core, edgeworth equilibrium allocutions, time and uncertainty, continuum economies, non-convexities, public goods, incomplete markets.

From equilibrium models to mechanism design: On the place and the role of government in the public goods provision analysis in the second part of the twentieth century

Focussing on their analysis of the optimal public goods provision problem, this paper follows the parallel development of equilibrium models and mechanism design after the accommodation of Samuelson's definition of collective goods to the general equilibrium framework. Both paradigms lead to the negative conclusion of the impossibility of a fully decentralized optimal public goods provision through market or market-like institutions.General equilibrium, Lindahl-Foley equilibrium, Wicksell public competitive equilibrium, private provision equilibrium, mechanism design, free-rider problem, incentive compatibility.

Government and the provision of public goods : from equilibrium models to mechanism design

Focusing on their analysis of the optimal public goods provision problem, this paper follows the parallel development of equilibrium models and mechanism design after the accomodation of Samuelson's definition of collective goods to the general equilibrium framework. Both paradigms lead to the negative conclusion of the impossibility of a fully decentralized optimal public goods provision through market or market-like institutions.Lindahl-Foley equilibrium, Wicksell-Foley equilibrium, private provision equilibrium, free-rider problem, mechanism design, incentive compatibility, principal-agent models.

Edgeworth and Walras equilibria of an arbitrage-free exchange economy

In this paper, we first give a direct proof of the existence of Edgeworth equilibria for exchange economies with consumption sets which are (possibly) unbounded below. The key assumption is that the individually rational utility set is compact. It is worth noticing that the statement of this result and its proof do not depend on the dimension or the particular structure of the commodity space. In a second part of the paper, we give conditions under which Edgeworth allocations can be decentralized by continuous prices in a finite dimensional and in an infinite dimensional setting. We then show how these results apply to some finance models.Arbitrage-free asset markets; individually rational utility set; Edgeworth equilibria; fuzzy coalitions; fuzzy core; Walras equilibria; quasiequilibria; properness of preferences

On the existence of Berge's strong equilibrium

In this paper, we establish the existence of Berge's strong equilibrium for games with n persons in infinite dimensional strategy spaces in the case where the payoff function of each player is quasi-concave. Moreover, we study the continuity of Berge's strong equilibrium correspondence and prove that most of Berge's strong games are essential.Nash equilibrium, strong Berge equilibrium, fixed point, essential games.

Incomplete markets in infinite horizon: debt constraints versus node prices.

The general equilibrium model with incomplete markets is here extended to infinite horizon economies populated. by a finite number of infinitely-lived agents. The crucial issue which divides the infinite horizon setting from the finite horizon setting is in the nature of borrowing constaints which added to spot constraints define a plausible budget set for individual agents. The paper relates seyen altemative definitions of equilibrium and states corresponding equilibrium existence theorems when assets are one-period and purely financial.Stochastic equilibrium; Incomplete markets; Infinite horizon; Purely financial; One-period securities; No-arbitrage asset pricing;

Satiated economies with unbounded consumption sets : fuzzy core and equilibrium

For an exchange economy, under assumptions which did not bring about the existence of quasiequilibrium with dividends as yet, we prove the nonemptiness of the fuzzy rejective core. Then, via Konovalov (1998, 2005)'s equivalence result, we solve the equilibrium (with dividends) existence problem. In a last section, we show the existence of a Walrasian quasiequilibrium under a weak non-satiation condition which differs from the weak non-satiation assumption introduced by Allouch-Le Van (2009). This result, designed for exchange economies whose consumers' utility functions are not assumed to be upper semicontinuous, complements the one obtained by Martins-da-Rocha and Monteiro (2009).Exchange economy, satiation, equilibrium with dividends, rejective core, fuzzy rejective core, core equivalence.