A GENERALIZATION OF KANEKO RATIO EQUILIBRIUM FOR ECONOMIES WITH PRIVATE AND PUBLIC-GOODS

We introduce an extension of Kaneko's ratio equilibrium to the case of economies with many public and private goods. Specifically, we employ a general production model where public goods may be inputs in the pr oduction of public goods. Using the accounting concept of transfer pri ces, we propose a definition of ratio equilibrium that generalizes Kan eko's. We prove that, under standard assumptions, ratio equilibria exi st and are free-access core allocations and therefore Pareto efficient .