An Algebraic Proof of the Existence of a Competitive Equilibrium in Exchange Economies
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Abstract: The standard excess demand argument for existence of competitive equilibria in exchange economies invokes maximizing the market value of the aggregate excess demand function and thereby adjusting the prices toward equilibrium. By exploiting the Perron-Frobenius theorem on stochastic matrices, we offer an algebraic proof of the existence of a competitive equilibrium without resorting to such a device of excess demand.
Cite this paper:
Sun, G. (2014) An Algebraic Proof of the Existence of a Competitive Equilibrium in Exchange Economies. Theoretical Economics Letters, 4, 232-234. doi: 10.4236/tel.2014.43031.
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