A note on the characterization of optimal allocations in OLG models with multiple goods

Jean-Marc Bonnisseau (1, 2) , Lalaina Rakotonindrainy (1, 2)

1 CES - Centre d'économie de la Sorbonne
2 PSE - Paris School of Economics

We consider a pure exchange overlapping generations economy with a varying number of commodities and consumers per period having possibly non-complete non transitive preferences. We provide a geometric and direct proof of the Balasko-Shell characterization of Pareto optimal allocation. As a by-product, we compute an explicit Pareto improving transfer when the criterion is not satisfied, which is minimal for some suitable distance.

Mots clés: Overlapping generations model; non complete non transitive preferences; normal cone; equilibrium; Pareto Optimality

Domaines: Economies et finances; Analyse fonctionnelle [math.FA]

Jean-Marc Bonnisseau, Lalaina Rakotonindrainy. A note on the characterization of optimal allocations in OLG models with multiple goods. 2015. ⟨halshs-01158117v2⟩