Towards the theory of general economic equilibrium

Occupation: Principal Scientific Researcher
Affiliation: Central Economics and Mathematics Institute, Russian Academy of Sciences (CEMI RAS)
Address: Moscow, Russian Federation

Journal name

Ekonomika i matematicheskie metody

Edition

Volume 58 Issue 3

Pages

19-27

Abstract

The paper proposes a model of general economic equilibrium, when some firms can influence prices by their actions. Their primitives (that is, the description of production, distribution, and consumption) of the proposed model are the same as those of the Arrow–Debreu model. The difference lies in the behavior of oligopolistic firms: it is assumed that they (as in the original Cournot model) assign their production plans. The main innovation is the description of the decision-making process on production plans by oligopolistic firms. In previous models, it was assumed that oligopolistic firms seek to maximize profits at current prices. Here, a more natural assumption is made that oligopolistic firms make decisions about production plans through a vote of shareholders. It is shown how the Arrow–Debreu model can be modified to account for this circumstance. The concept of Condorcet–Cournot–Walras equilibrium is introduced, combining the ideas of these three classics. The question of the existence of equilibria is discussed. A simplified version of the model is also considered, in which each firm is owned by one agent. The simplification is that there is no need to turn to the voting.

Keywords

Arrow-Debreu model, Cournot equilibrium, oligopoly, voting, Condorcet winner, profit maximization.

Received

07.03.2022

Publication date

22.09.2022

Number of characters

32376

Cite

GOST	Danilov V. Towards the theory of general economic equilibrium // Ekonomika i matematicheskie metody – 2022. – V. 58. – Issue 3 C. 19-27 [Electronic resource]. URL: https://emm.jes.su/S042473880020012-2-1 (circulation date: 02.05.2024). DOI: 10.31857/S042473880020012-2
MLA	Danilov, Vladimir "Towards the theory of general economic equilibrium." Ekonomika i matematicheskie metody 58.3 (2022):19-27. DOI: 10.31857/S042473880020012-2
APA	Danilov V. (2022). Towards the theory of general economic equilibrium. Ekonomika i matematicheskie metody 58(3), pp.19-27 DOI: 10.31857/S042473880020012-2

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