The First Fundamental Theorem of Welfare in a General Equilibrium Evolutionary Setting

9 Pages Posted: 16 Jul 2019

See all articles by Ahmad Kabir Naimzada

Ahmad Kabir Naimzada

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Marina Pireddu

Universita di Milano Bicocca - Department of Mathematics and Applications

Date Written: July 16, 2019

Abstract

In the present note we prove the first fundamental theorem of welfare economics, according to which all equilibrium allocations are Pareto optimal, for the standard pure exchange model with shares. In this context the social interaction among agents enters the definition of equilibrium only through the market clearing conditions, but it does not affect the agents’ maximization problem. We show that the first fundamental theorem of welfare holds true also when introducing stationary equilibria in relation to a share updating mechanism.

Keywords: general equilibrium, stationary equilibria, Pareto optimality

Suggested Citation

Naimzada, Ahmad Kabir and Naimzada, Ahmad Kabir and Pireddu, Marina, The First Fundamental Theorem of Welfare in a General Equilibrium Evolutionary Setting (July 16, 2019). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 415, July 2019, Available at SSRN: https://ssrn.com/abstract=3420672 or http://dx.doi.org/10.2139/ssrn.3420672

Ahmad Kabir Naimzada (Contact Author)

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Marina Pireddu

Universita di Milano Bicocca - Department of Mathematics and Applications ( email )

Piazza Ateneo Nuovo 1
Milano, Milan 20126
Italy

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