TD n. 609 2013

Yves Balasko.

Social demand functions result from the budget constrained maximization of “social

preferences” or “other regarding preferences.” These preferences are non-selfish

in the sense that they also depend on other consumers’ wealth. This paper addresses

the robustness to wealth externalities of the classical general equilibrium model with

finite numbers of goods and consumers. The existence of equilibrium, the genericity of

regular economies and, at those regular economies, the finite odd number of equilibria

and the local continuity of equilibrium selection maps, and finally the identification

(or diffeomorphism) of the equilibrium manifold with a Euclidean space are shown

to be satisfied independently of the size of those wealth externalities provided total

resources are variable