Technical Report Universality and Efficiency of Price Mechanism based on an Expansion Possibility of Economies

Murakami, Hiromi  ,  Urai, Ken  ,  Shiraishi, Kohzo

16-10pp.1 - 9 , 2016-05 , Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University
In this paper, we axiomatically characterize the universality and efficiency of price mechanism based on an expansion possibility of economic environments like trading rtunities, immigrants, agents'consumption sets through the cultural globalization, and so on. Together with some generalized settings like economy dependent message-response structure, we base our argument on the framework of Sonnenschein (1974). In Sonnenschein (1974), the price mechanism is characterized in more specific way than that of Hurwicz (1960), Mount and Reiter (1974), etc. for the informational efficiency problem. His model, however, has an dvantage to describe the universality and efficiency of the price mechanism from the category-theoretic viewpoint through the basic economic tool of the excess demand function. His approach also enables us to characterize the price mechanism through cooperative game theoretic settings like the core quivalence that is closely related to the replica stability axiom of social choice settings like Thomson (1988) and Nagahisa (1994).

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