Equilibrium in an exchange economy with multiple indivisible commodities and money

We introduce an economy in which agents exchange their indivisible commodit ies and money. There are finitely many agents and finitely many different t ypes of indivisible commodities. Commodities of the same type are subject t o quality differentiation but have the same function for the agents. Each a gent is initially endowed with several units of each type of indivisible co mmodities and a positive amount of money. Money is treated as a perfectly d ivisible commodity. We demonstrate that there exists at least one competiti ve equilibrium in this economy under some conditions on the utility functio ns of the agents. The results obtained in this paper generalize those of Qu inzii [Quinzii, M., 1984. Core and competitive equilibria with indivisibili ties. Int. J. Game Theory 13, 41-60] and Yamamoto [Yamamoto, Y., 1987. Comp etitive equilibria in the market with indivisibility. In: Talman, A.J.J., v an der Laan, G. (Eds.), The Computation and Modelling of Economic Equilibri a. North-Holland, Amsterdam, pp. 193-204] by whom economic models with one type of indivisible commodity are considered. (C) 2000 Elsevier Science S.A . All rights reserved. JEL classification: C78; D71.