Pure Exchange Economic And Competitive Equilibrium With Transaction Costs

Arrow and Debreu(1954) first strictly proved the existence of general equilibrium under the conditions of strong assumption.They established the axiomatic theory about the existence, optimality,stability and uniqueness of the equilibrium of a market economy system.After that many work have been done based on the Arrow-Debreu equilibrium model.Clearly,the Arrow-Debreu equilibrium model is too idealistic.Arrow-Debreu equilibrium model considers zero transaction costs as an implicit assumption premise,transaction costs is unavoidable in reality,thereby weakening the assumption that research the development of the theory of general equilibrium trend.The transaction costs has been advanced first by coase in the 20th century the 30s, many economists have controversed the concept of the transaction costs afterward..Along with "the transaction cost" concept research's unceasing deepening,the transaction cost in social economy's status was known by the people more and more.At present,many new system economists to have conducted comprehensive and the thorough research with the transaction cost related many questions,but the mainly aims at some kind of specific economic phenomena to carry on,but it is very few to accommodate transaction cost in general equilibrium model to research by article also.Under general equilibrium framework to explore the transaction cost is Foley in the first (1970),he has set up the equilibrium model with transaction cost was very similar to the Arrow-Debreu model's.Transaction take place in a market,it defined a sale price and a purchase price,its price margin was the transaction cost,and the transaction cost regarded as was undertook by a big enterprise;Since then,Hahn(1971)established a sequence economic models,the hypothesis had many markets,the commodity exchange price was different in the different market,and the same transaction costs by an external commitment the traders needed to achieve the balanced revenues and expenditures in each market,but the transaction cost undertook similarly by a big enterprise.After that,Kurz(1974) also established a single market pure exchange economic model,the main results of the model was the same with Foley basically,the diversity lies in Kurz the transaction cost was undertook by the economic man, but not by a big enterprise it increase the difficulties to prove the existence,in general assumption that the standard conditions,the equilibrium was not Pareto efficient.He has used a very complicated concept in the paper,which the positive component and the negative was separated,and increase the complexity of the budget sets.The following is the mainly work and content of this thesis For the purpose of making sense gradually,It first attempts through the various economists about the different explanation of transaction cost in the different time,enable we have one comprehensively,the clear understanding of "the transaction cost" essence.After that has proved the competitive equilibrium existence under zero transaction costs by applying the social equilibrium theorem of generalized game.in the end it accommodate transaction costs in general equilibrium model.and In Kurz work foundation,under very weak assumption it has proved the existence of the competitive equilibrium in pure exchange economy.Thesis includes the following specific elementThe first is prelude which is summarization;the second has Summarized the concept of transaction cost according to historical period's development,which attempts through the various economists about the different explanation of transaction cost in the different time, enable we have one comprehensively,the clear understanding of "the transaction cost" essence;the third we discussed the competitive equilibrium existence under zero transaction costs by applying the social equilibrium theorem of generalized game;the fourth we Construct the pure exchange economic model,have prove the existence of the competitive equilibrium in pure exchange economy,the fifth is summarization.