We investigate the consequences of imposing additivity on community preferences. We show that there are important implications of additive community preferences that are not implied by the additivity of a single consumer's preferences. In particular, we show that imposing additivity on community preferences implies the existence of a representative consumer with a utility function in the CES family. We demonstrate the restrictive nature of these implications with three examples. Our interpretation of the results is that single consumer models are unable to adequately represent important features of multi-consumer economies.

It is frequent practice to model an industry or economy as if it were a single agent solving a single optimization problem. A model of firm behavior which has had extensive use as an aggregative model is the adjustment cost model of investment. We assume there are a number of competitive firms in an industry that choose investment paths to maximize their present value; the technologies of the firms exhibit capital stock adjustment costs. For general concave technologies of the firms, there is no aggregate concave technology that can represent the technological possibilities available to the industry. We find conditions on the technologies of the firms that are necessary and sufficient for the existence of an aggregate technology that can consistently model the industry's behavior and discuss their empirical implications.

Although models with factor price equalization are used frequently in both theoretical and applied research in international economics, only sufficient conditions for factor price equalization have been presented in the literature. In this paper, we present necessary and sufficient conditions for FPE under quite general assumptions about the technologies of different countries. The necessary and sufficient conditions we derive are consistent with joint production, decreasing returns to scale, and substantive differences in the technologies and endowments of different countries. Our results enable us to reconcile the classical approach and the integrated equilibrium approach to factor price equalization.