COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Post Office Box 208281
New Haven, CT 06520-8281

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.

See CFP 653