北大微观经济学课件英文版Ch29Exchang参考PPT

1、2021/2/23,1,Chapter Twenty-Nine,Exchange,2021/2/23,2,Exchange,Two consumers, A and B. Their endowments of goods 1 and 2 are E.g. The total quantities available,and,and,units of good 1,units of good 2,and,are,2021/2/23,3,Exchange,Edgeworth and Bowley devised a diagram, called an Edgeworth box, to sho

2、w all possible allocations of the available quantities of goods 1 and 2 between the two consumers,2021/2/23,4,Starting an Edgeworth Box,2021/2/23,5,Starting an Edgeworth Box,Width,2021/2/23,6,Starting an Edgeworth Box,Width,Height,2021/2/23,7,Starting an Edgeworth Box,Width,Height,The dimensions oft

3、he box are thequantities availableof the goods,2021/2/23,8,Feasible Allocations,What allocations of the 8 units of good 1 and the 6 units of good 2 are feasible? How can all of the feasible allocations be depicted by the Edgeworth box diagram,2021/2/23,9,Feasible Allocations,What allocations of the

4、8 units of good 1 and the 6 units of good 2 are feasible? How can all of the feasible allocations be depicted by the Edgeworth box diagram? One feasible allocation is the before-trade allocation; i.e. the endowment allocation,2021/2/23,10,Width,Height,The endowmentallocation is,and,The Endowment All

5、ocation,2021/2/23,11,Width,Height,The Endowment Allocation,2021/2/23,12,OA,OB,6,8,The Endowment Allocation,2021/2/23,13,OA,OB,6,8,4,6,The Endowment Allocation,2021/2/23,14,OA,OB,6,8,4,6,2,2,The Endowment Allocation,2021/2/23,15,OA,OB,6,8,4,6,2,2,Theendowmentallocation,The Endowment Allocation,2021/2

6、/23,16,More generally,The Endowment Allocation,2021/2/23,17,The Endowment Allocation,OA,OB,Theendowmentallocation,2021/2/23,18,Other Feasible Allocations,denotes an allocation to consumer A. denotes an allocation to consumer B. An allocation is feasible if and only if,and,2021/2/23,19,Feasible Reall

7、ocations,OA,OB,2021/2/23,20,Feasible Reallocations,OA,OB,2021/2/23,21,Feasible Reallocations,All points in the box, including the boundary, represent feasible allocations of the combined endowments,2021/2/23,22,Feasible Reallocations,All points in the box, including the boundary, represent feasible

8、allocations of the combined endowments. Which allocations will be blocked by one or both consumers? Which allocations make both consumers better off,2021/2/23,23,Adding Preferences to the Box,OA,For consumer A,2021/2/23,24,Adding Preferences to the Box,More preferred,For consumer A,OA,2021/2/23,25,A

9、dding Preferences to the Box,For consumer B,OB,2021/2/23,26,Adding Preferences to the Box,More preferred,For consumer B,OB,2021/2/23,27,Adding Preferences to the Box,More preferred,For consumer B,OB,2021/2/23,28,Adding Preferences to the Box,OA,For consumer A,2021/2/23,29,Adding Preferences to the B

10、ox,OA,OB,2021/2/23,30,Edgeworths Box,OA,OB,2021/2/23,31,Pareto-Improvement,An allocation of the endowment that improves the welfare of a consumer without reducing the welfare of another is a Pareto-improving allocation. Where are the Pareto-improving allocations,2021/2/23,32,Edgeworths Box,OA,OB,202

11、1/2/23,33,Pareto-Improvements,OA,OB,The set of Pareto-improving allocations,2021/2/23,34,Pareto-Improvements,Since each consumer can refuse to trade, the only possible outcomes from exchange are Pareto-improving allocations. But which particular Pareto-improving allocation will be the outcome of tra

12、de,2021/2/23,35,Pareto-Improvements,OA,OB,The set of Pareto-improving reallocations,2021/2/23,36,Pareto-Improvements,2021/2/23,37,Pareto-Improvements,2021/2/23,38,Pareto-Improvements,Tradeimproves bothAs and Bs welfares.This is a Pareto-improvementover the endowment allocation,2021/2/23,39,Pareto-Im

13、provements,New mutual gains-to-trade region is the set of all further Pareto- improving reallocations,Tradeimproves bothAs and Bs welfares.This is a Pareto-improvementover the endowment allocation,2021/2/23,40,Pareto-Improvements,Further trade cannot improve both A and Bs welfares,2021/2/23,41,Paret

14、o-Optimality,Better forconsumer B,Better forconsumer A,2021/2/23,42,Pareto-Optimality,A is strictly better off but B is strictly worse off,2021/2/23,43,Pareto-Optimality,A is strictly better off but B is strictly worse off,B is strictly betteroff but A is strictlyworse off,2021/2/23,44,Pareto-Optima

15、lity,A is strictly better off but B is strictly worse off,B is strictly betteroff but A is strictlyworse off,Both A andB are worseoff,2021/2/23,45,Pareto-Optimality,A is strictly better off but B is strictly worse off,B is strictly betteroff but A is strictlyworse off,Both Aand B are worse off,Both

16、A andB are worseoff,2021/2/23,46,Pareto-Optimality,The allocation isPareto-optimal since theonly way one consumers welfare can be increased is todecrease the welfare of the otherconsumer,2021/2/23,47,Pareto-Optimality,The allocation isPareto-optimal since theonly way one consumers welfare can be inc

17、reased is todecrease the welfare of the otherconsumer,An allocation where convexindifference curves are “only just back-to-back” is Pareto-optimal,2021/2/23,48,Pareto-Optimality,Where are all of the Pareto-optimal allocations of the endowment,2021/2/23,49,Pareto-Optimality,OA,OB,2021/2/23,50,Pareto-

18、Optimality,OA,OB,All the allocations marked bya are Pareto-optimal,2021/2/23,51,Pareto-Optimality,The contract curve is the set of all Pareto-optimal allocations,2021/2/23,52,Pareto-Optimality,OA,OB,All the allocations marked bya are Pareto-optimal,The contract curve,2021/2/23,53,Pareto-Optimality,B

19、ut to which of the many allocations on the contract curve will consumers trade? That depends upon how trade is conducted. In perfectly competitive markets? By one-on-one bargaining,2021/2/23,54,The Core,OA,OB,The set of Pareto-improving reallocations,2021/2/23,55,The Core,OA,OB,2021/2/23,56,The Core

20、,OA,OB,Pareto-optimal trades blocked by B,Pareto-optimal trades blocked by A,2021/2/23,57,The Core,OA,OB,Pareto-optimal trades not blocked by A or B,2021/2/23,58,The Core,OA,OB,Pareto-optimal trades not blocked by A or B are the core,2021/2/23,59,The Core,The core is the set of all Pareto-optimal al

21、locations that are welfare-improving for both consumers relative to their own endowments. Rational trade should achieve a core allocation,2021/2/23,60,The Core,But which core allocation? Again, that depends upon the manner in which trade is conducted,2021/2/23,61,Trade in Competitive Markets,Conside

22、r trade in perfectly competitive markets. Each consumer is a price-taker trying to maximize her own utility given p1, p2 and her own endowment. That is,2021/2/23,62,Trade in Competitive Markets,OA,For consumer A,2021/2/23,63,Trade in Competitive Markets,So given p1 and p2, consumer As net demands fo

23、r commodities 1 and 2 are,and,2021/2/23,64,Trade in Competitive Markets,And, similarly, for consumer B,2021/2/23,65,Trade in Competitive Markets,For consumer B,OB,2021/2/23,66,Trade in Competitive Markets,So given p1 and p2, consumer Bs net demands for commodities 1 and 2 are,and,2021/2/23,67,Trade

24、in Competitive Markets,A general equilibrium occurs when prices p1 and p2 cause both the markets for commodities 1 and 2 to clear; i.e,and,2021/2/23,68,Trade in Competitive Markets,OA,OB,2021/2/23,69,Trade in Competitive Markets,OA,OB,Can this PO allocation be achieved,2021/2/23,70,Trade in Competit

25、ive Markets,OA,OB,Budget constraint for consumer A,2021/2/23,71,Trade in Competitive Markets,OA,OB,Budget constraint for consumer A,2021/2/23,72,Trade in Competitive Markets,OA,OB,Budget constraint for consumer B,2021/2/23,73,Trade in Competitive Markets,OA,OB,Budget constraint for consumer B,2021/2

26、/23,74,Trade in Competitive Markets,OA,OB,But,2021/2/23,75,Trade in Competitive Markets,OA,OB,and,2021/2/23,76,Trade in Competitive Markets,So at the given prices p1 and p2 there is an excess supply of commodity 1 excess demand for commodity 2. Neither market clears so the prices p1 and p2 do not ca

27、use a general equilibrium,2021/2/23,77,Trade in Competitive Markets,OA,OB,So this PO allocation cannot be achieved by competitive trading,2021/2/23,78,Trade in Competitive Markets,OA,OB,Which PO allocations can beachieved by competitive trading,2021/2/23,79,Trade in Competitive Markets,Since there i

28、s an excess demand for commodity 2, p2 will rise. Since there is an excess supply of commodity 1, p1 will fall. The slope of the budget constraints is - p1/p2 so the budget constraints will pivot about the endowment point and become less steep,2021/2/23,80,Trade in Competitive Markets,OA,OB,Which PO

29、 allocations can beachieved by competitive trading,2021/2/23,81,Trade in Competitive Markets,OA,OB,Which PO allocations can beachieved by competitive trading,2021/2/23,82,Trade in Competitive Markets,OA,OB,Which PO allocations can beachieved by competitive trading,2021/2/23,83,Trade in Competitive M

30、arkets,OA,OB,Budget constraint for consumer A,2021/2/23,84,Trade in Competitive Markets,OA,OB,Budget constraint for consumer A,2021/2/23,85,Trade in Competitive Markets,OA,OB,Budget constraint for consumer B,2021/2/23,86,Trade in Competitive Markets,OA,OB,Budget constraint for consumer B,2021/2/23,8

31、7,Trade in Competitive Markets,OA,OB,So,2021/2/23,88,Trade in Competitive Markets,OA,OB,and,2021/2/23,89,Trade in Competitive Markets,At the new prices p1 and p2 both markets clear; there is a general equilibrium. Trading in competitive markets achieves a particular Pareto-optimal allocation of the

32、endowments. This is an example of the First Fundamental Theorem of Welfare Economics,2021/2/23,90,First Fundamental Theorem of Welfare Economics,Given that consumers preferences are well-behaved, trading in perfectly competitive markets implements a Pareto-optimal allocation of the economys endowmen

33、t,2021/2/23,91,Second Fundamental Theorem of Welfare Economics,The First Theorem is followed by a second that states that any Pareto-optimal allocation (i.e. any point on the contract curve) can be achieved by trading in competitive markets provided that endowments are first appropriately rearranged

34、 amongst the consumers,2021/2/23,92,Given that consumers preferences are well-behaved, for any Pareto-optimal allocation there are prices and an allocation of the total endowment that makes the Pareto-optimal allocation implementable by trading in competitive markets,Second Fundamental Theorem of We

35、lfare Economics,2021/2/23,93,Second Fundamental Theorem,OA,OB,The contract curve,2021/2/23,94,Second Fundamental Theorem,OA,OB,2021/2/23,95,Second Fundamental Theorem,OA,OB,Implemented by competitive trading from the endowment w,2021/2/23,96,Second Fundamental Theorem,OA,OB,Can this allocation be im

36、plementedby competitive trading from w,2021/2/23,97,Second Fundamental Theorem,OA,OB,Can this allocation be implementedby competitive trading from w? No,2021/2/23,98,Second Fundamental Theorem,OA,OB,But this allocation is implementedby competitive trading from q,2021/2/23,99,Walras Law,Walras Law is