S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics (SJE) Seoul Journal of Economics vol.14(4) (Winter 2001)
Bargaining and Walrasian Equilibrium in Simple Production Economies
- Issue Date
- Seoul Journal of Economics, Vol.14 No.4, pp. 379-406
- We consider a class of production economies in which there are two goods, leisure and a consumption good, and there are a large number of consumers and firms, modelled as continua. We formalize a bargaining procedure in the labor market, and examine the relation between the bargaining equilibria and the Walrasian equilibria of the underlying production economy. We show that every bargaining equilibrium allocation coincides with a Walrasian equilibrium allocation in the underlying economy. So, a Gale-type result is obtained for our production economies.