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Existence, uniqueness and efficiency of equilibrium in hedonic markets with multidimensional types. (English) Zbl 1203.91153

The author studies equilibrium in hedonic markets, when consumers and suppliers have reservation utilities, and the utility functions are separable with respect to price. There is one indivisible good, which comes in different quantities; each consumer buys \(0\) or \(1\) unit, and each supplier sells \(0\) or \(1\) unit. Consumer types, supplier types and quantities can be either discrete or continuous, in which case they are allowed to be multidimensional. The author defines equilibrium prices and equilibrium distributions and he proves that equilibria exist, he investigates to what extent equilibrium prices and distributions are unique and he proves that equilibria are efficient. In the particular case when there is a continuum of types and a generalized Spence-Mirrlees condition is satisfied, the existence of pure equilibrium is given. The main features of the model are: (1) There is a single, indivisible, good in the market, and it comes in different quantities. (2) Consumers and producers are price-taker and utility-maximizers. (3) The utilities of consumers and of producers are quasi-linear with respect to price. These results are valid in the discrete and continuous case.

MSC:

91B52 Special types of economic equilibria
91B54 Special types of economic markets (including Cournot, Bertrand)
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