Abstract
This paper presents a general model of an economy with transaction costs, and proves the existence of a competitive equilibrium using T. C. Bergstrom's procedure to discard the free-disposal assumption. Since economies with incomplete markets are shown to be special cases of economies with transaction costs, this result is used to discuss the conditions for the existence of an equilibrium in economies with incomplete markets. Copyright 1987 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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