COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 724 "On a General Existence Theorem for Marginal Cost Pricing Equilibria" Donald J. Brown, Geoffrey M. Heal, M. Ali Khan and Rajiv Vohra December 1984 We report a generalization of recent results on the existence of marginal cost pricing
equilibria (MCPE) in economies with an increasing returns to scale industry. Our result
makes no ad hoc assumptions which force the equilibrium to be on the efficiency frontier
of the aggregate production possibility set. We also present an additional condition under
which our MCPE are productivity efficient in the aggregate. |
