AXIOMATIC CHARACTERIZATIONS OF THE WALRAS CORRESPONDENCE FOR GENERALIZED ECONOMIES

A generalized (pure exchange) economy consists of a list of agents, ut ility functions and initial endowments for each agent, and a net trade vector that describes the trade between the economy and the outside w orld. In this paper we extend the definition of Walras equilibria to g eneralized economies without free disposal of commodities. An existenc e result is presented and we provide two axiomatic characterizations o f Walras allocations based on the axioms of consistency and converse c onsistency. Also, a characterization of the utility vectors correspond ing to strictly positive Walras allocations is given. It is shown that the assumption of free disposal can, for generalized economies, lead to non-Pareto-optimal Walras allocations.