WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS EXISTENCE OF EQUILIBRIA FOR ECONOMIES WITH EXTERNALITIES AND A MEASURE SPACE OF CONSUMERS

Existence of equilibria for economies with externalities and a measure space of consumers Bernard Cornet ∗and Mihaela Topuzu† This paper considers an exchange economy with a measure space of agents and consumption externalities, which take into account two possible external effects in consumers ’ preferences: the dependence upon prices and other agents ’ consumptions, respectively, as in Greenberg et al. [12] and Khan and Vohra [15] (see also Balder [4] for a general discussion). This allows to cover a general model of reference coalitions externalities, in which the agents ’ preferences are influenced by the global (or the mean) consumption of the agents in the finitely many reference coalitions. Our paper provides a general existence theorem of equilibria that extends previous results by Schmeidler [21], in the case of fixed reference coalitions and Noguchi [17], for a more particular concept of reference coalitions