On economic efficiency under non-convexity. (English) Zbl 1246.91077
Summary: This paper investigates economic efficiency under non-convexity. The analysis relies on a generalization of the separating hyperplane theorem under non-convexity. The concept of zero-maximality is used to characterize Pareto efficiency under non-convexity. We show the existence of a separating hypersurface that can be used to provide a dual characterization of efficient allocations. When the separating hypersurface is non-linear, this implies that non-linear pricing is an integral part of economic efficiency. Implications for the decentralization of economic decisions under non-convexity are discussed.
MSC:
| 91B54 | Special types of economic markets (including Cournot, Bertrand) |
| 90C26 | Nonconvex programming, global optimization |
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