Characterization of an extended Walrasian concept for open economies

Abstract

The consistency axiom, which is quite prominent in the framework of concepts of cooperative games, can be used to characterize concepts for economies as well. Dagan [Dagan, N., 1996b. Consistency and the Walrasian allocations correspondence. A revised version of Economics Working Paper No. 151, Universitat Pompeu Fabra, Barcelona, Spain.] and van den Nouweland et al. [van den Nouweland, A., Peleg, B., Tijs, S., 1996. Axiomatic characterization of the Walras correspondence for generalized economies. Journal of Mathematical Economics 25, 355–372.] used the setting of open economies to give axiomatic characterizations of an extension of the Walras correspondence. Here, we will characterize the proportional Walrasian concept, an extension which was proposed by Thomson [Thomson, W., 1992. Consistency in exchange economies. Mimeo, Department of Economics, University of Rochester, Rochester, NY.] and which is non-empty on a much bigger class of open economies. Apart from consistency properties and other frequently used axioms, we also employ an axiom on distribution.