Existence of Competitive Equilibrium Under Financial constraints and Increased Returns
Ata, H. N.
Journal of Economic Dynamics and Control
Ata, H. N., & Başçı, E. (2004). Existence of competitive equilibrium under financial constraints and increasing returns. Journal of Economic Dynamics and Control, 28(12), 2457-2473.
Please cite this item using this persistent URLhttp://hdl.handle.net/11693/11299
This paper studies a 'factor cost in advance' model with increasing returns in production. In the model both partial equilibrium and general equilibrium may exist since working capital of firms limit their input demand. We provide a sufficient condition for the existence of partial equilibrium of a firm operating on a non-convex choice set. Furthermore we establish the existence and uniqueness of competitive equilibrium in the special case of logarithmic utility. (C) 2004 Elsevier B.V. All rights reserved.
- Department of Economics