ON CONTRACTUAL APPROACH IN PRODUCTION ECONOMIES OF ARROW–DEBREU–MCKENZIE TYPE
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ON CONTRACTUAL APPROACH IN PRODUCTION ECONOMIES OF ARROW–DEBREU–MCKENZIE TYPE
Annotation
PII
S042473880000616-6-1
Publication type
Article
Status
Published
Authors
Valery Marakulin 
Pages
61-79
Abstract

The paper applies and elaborates contractual approach to study economies with convex and nonconvex production aggregate. The notions and terms of barter contractual approach developed in (Marakulin, 2003, 2011) for exchange economies are now modified and extended to the production economy; known earlier notions adopted: web of contracts, domination via coalitions among webs, partial breaking of contracts and so on. A new notion of marginal contractual allocation is introduced for the model with non-convex production. Then it is applied to describe marginal cost pricing (MCP) equilibrium, the notion used in non-convex case instead of Walrasian equilibrium. Main results are presented in theorems on equivalence of equilibria and specific (proper, fuzzy, marginal) contractual allocation, implemented via web of contacts stable relative to a partial break. An equivalence between marginal contractual allocation and MCP-equilibrium can be considered its theoretical foundation for non-convex economies. The paper presents and develops specific universal form of perfect competition implemented via contractual approach.

Keywords
competitive equilibrium, MCP-equilibrium, core, contract, contractual approach, production economy, non-convex production
Date of publication
01.01.2014
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0
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85
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