Econometrica: Jul 1983, Volume 51, Issue 4

Large Indivisibles: An Analysis with Respect to Price Equilibrium and Fairness

https://doi.org/0012-9682(198307)51:4<939:LIAAWR>2.0.CO;2-T
p. 939-954

Lars-Gunnar Svensson

An exchange economy is considered in which there are a finite number of individuals, the same number of indivisibles, and a fixed amount of a divisible good. Each individual consumes exactly one of the indivisibles and a certain quantity of the divisible good. The existence of prices corresponding to Pareto-efficient allocations is proved. It is also shown that this economy possesses fair allocations, income-fair allocations, coalition-fair allocations, and Pareto-efficient egalitarian-equivalent allocations.

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