A NOTE ON DIFFERENT CONCEPTS OF GENERALIZED EQUILIBRIA

Without a survival assumption, equilibrium may not exist in the standa rd Arrow-Debreu model. Here, we study two approaches of generalized eq uilibrium, allowing for the relaxation of such an unrealistic assumpti on. Danilov and Sotskov's EV-equilibrium is characterized by a stratif ication of the economy into different submarkets. We show existence of such an equilibrium with a continuum of traders. This enables us to p rove existence of a pseudo equilibrium [(Mertens, 1995)] for a class o f preference relations containing linear utility functions. Later, we show that an iteration of pseudo equilibria (iterative pseudo equilibr ium), a concept introduced in Mertens, 1995 is a particular case of an EV-equilibrium. (C) 1998 Elsevier Science S.A.