Review of Economic Studies Vol. 55 No. 3 1988
The Core of an Economy with Transaction Costs
Abstract
This paper defines a new concept of the core for an economy with transaction costs, and uses this concept to prove a limit theorem for sequences of replica economies. In this way it provides a rationale for a definition of equilibrium in which agents face a sequence of budget constraints. Since economies with incomplete markets are special cases of economies with transaction costs, the limit theorem also provides a rationale for Radner's equilibrium of plans, prices, and price expectations.
- DOI
- 10.2307/2297394
- Volume
- 55
- Issue
- 3
- Pages
- 447
- Sources
- bibtex:phds-export.bib openalex crossref