COMPETITIVE-EQUILIBRIUM WITH INDIVISIBILITIES

This paper studies an exchange economy with a finite number of agents in which each agents is initially endowed with a finite number of (per sonalized) indivisible commodities. We observe that the equivalence th eorem of the core and the competitive equilibrium may not hold for thi s economy when the coalitional form game is generated in the standard manner. We provide an alternative definition of the coalitional form g ame to resolve this problem so that the balancedness of the new define d game provides a useful necessary and sufficient condition for the ex istence of competitive equilibrium for the original economy. (C) 1998 Academic Press.