Lone wolves in competitive equilibria
By: Ravi Jagadeesan, Harvard University, Scott Duke Kominers, Harvard Business School, Ross Rheingans-Yoo, Harvard University
Series: Working paper / Harvard Business School -- 18-055; Working paper (Harvard Business School) -- 18-055
Publisher: Harvard Business School
Published: 2017
Place of publication: Boston
Language: eng
Number of pages: 20
Description: This paper develops a class of equilibrium-independent predictions of competitive equilibrium with indivisibilities. Specifically, we prove an analogue of the "Lone Wolf Theorem" of classical matching theory, showing that when utility is perfectly transferable, any agent who does not participate in trade in one competitive equilibrium must receive her autarky payoff in every competitive equilibrium. Our results extend to approximate equilibria and to settings in which utility is only approximately transferable.
Notes: Includes bibliographical references (pages 18-20.