Efficiency and core properties of valuation equilibrium with increasing returns
- Hammond, Peter
- Villar, Antonio
Ano de publicación: 2001
Número: 24
Tipo: Documento de traballo
Resumo
This paper considers market economies involving the choice of a public environment when there are nonconvexities in production. It discusses the decentralization of efficient allocations by means of valuation equilibrium, adapting to many private goods the notion due to Mas-Colell (1980) which extends the Lindahlian approach to the pure theory of public goods. It is shown that a valuation equilibrium satisfies the two welfare theorems and is in the core.