Characteristics of good and competitive equilibrium
Recherches Économiques de Louvain / Louvain Economic Review, Vol. 70, No. 3 (2004), pp. 363-368
Damien Gaumontet Philippe Michel
We analyse the consequences of a change of the characteristics of goods due to new information on the equilibrium of a pure exchange economy with n goods and m agents. Some changes of the characteristics of goods à la Lancaster have a positive effect on utility. In the general competitive equilibrium, some agents gain but others may lose. Nevertheless there is an increase of a linear combination of the utilities of the agents. The different possibilities of gains and losses are explicitly analysed in an example with two goods and two agents.