Recontracting and competition
We characterize the set of Walrasian allocations of an economy as the set of allocations which can be supported by abstract equilibria that satisfy a recontracting condition which reflects the idea that agents can freely trade with each other. An alternative (and weaker) recontracting condition characterizes the core. The results are extended to production economies by extending the definition of the recontracting condition to include the possibility of agents to recontract with firms. However, no optimization requirement is imposed on firms. In pure exchange economies, an abstract equilibrium is a feasible allocation and a list of choice sets, one for each agent, that satisfy the following conditions: an agent's choice set is a subset of the commodity space that includes his endowment; and each agent's equilibrium bundle is a maximal element in his choice set, with respect to his preferences. The recontracting condition requires that any agent can buy bundles from any other agent's choice set by offering the other agent a bundle he prefers to his equilibrium bundle.
Bargaining, coalitions and competition
Summary. We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walrasian allocations of the economy. Our method of proof makes use of the theory of the core. With respect to previous work, our positive implementation result applies to a substantially larger class of economies: the model relaxes differentiability and convexity of preferences, and also admits an arbitrary number of divisible and indivisible goods.
Continuity, Legitimacy, and Agricultural Development: Conclusions
This chapter aims at bringing together the principal conclusions of the volume, emphasising some particular aspects and questions. Policy continuity in relation to the late 1980s was rightly defined by the Aylwin government policymakers as an essential instrument for further agricultural growth. But in a democratic environment the Aylwin policies, in part precisely because of their strong element of continuity, could be implemented only if they were perceived as legitimate by the majority of the rural population, and by the poor in particular. This means that substantial improvements in agricultural income distribution, and in the quantity and quality of the social services provided to the rural poor, were unavoidable. In order to achieve legitimacy it was, and is, necessary to introduce changes. A lucid, creative combination of continuity and change was the only guarantee of success for the Aylwin policies, and for those of future democratic administrations. Continuity and legitimacy are the fundamental pillars for democratic agricultural development.