Economic equilibrium through variational inequalities
Volume 36 / 2009
Applicationes Mathematicae 36 (2009), 43-58
MSC: Primary 91B50; Secondary 65K10.
DOI: 10.4064/am36-1-4
Abstract
The purpose of this paper is to present an alternative proof of the existence of the Walrasian equilibrium for the Arrow–Debreu–McKenzie model by the variational inequality technique. Moreover, examples of the generalized Arrow–Debreu–McKenzie model are given in which the price vector can reach the boundary of the orthant allowing a commodity to be of price zero at equilibrium. In such a case its supply exceeds demand. It is worth mentioning that utility functions in this model are allowed not to be strictly concave and they can reach their maximum in the commodity space.
