Existence of an Equilibrium in a General Competitive Exchange
Economy with Indivisible Goods and Money

Satoru Fujishige

and

Zaifu Yang

We introduce a general competitive exchange economy with indivisible goods and money. There are finitely many agents and finitely many indivisible goods. Each agent is initially endowed with several units of each indivisible good and certain amount of money. Money is treated as a perfectly divisible good. The agentsí preferences depend on the bundle of indivisible goods and the quantity of money they consume. Preferences are quite general and are not required to be quasilinear in money. We derive a necessary and sufficient condition for the existence of a competitive equilibrium in the economy. The model and the existence results we provide here unify and extend most models and existence results that have appeared in the literature.

Key Words: Indivisibility; Equilibrium; Fixed point; Discrete optimization.
JEL Classification Numbers: C78, D44, D71.