The use of prices to characterize the core of an economy
Abstract The core of an economy is the set of outcomes of trading and production which have the property that no coalition of traders and producers can do better for its members. When the traders and producers are “perfectly competitive,” any such outcome can be achieved by using an appropriate price system. This paper establishes this well-known result under very general conditions by building on a model due to Vind. Particular attention is paid to the problem of representing “perfect competition” and of describing production in a nonmarket economy. All assumptions in this model are formulated so as to be easily compared with the assumptions made by Aumann in his model of a perfectly competitive economy.