Linear and non-linear price decentralization

Compendious and thorough solutions to the existence of a linear price equilibrium problem, the secondwelfare theorem, and the limit theoremon the core are provided for exchange economieswhose consumption sets are the positive cone of arbitrary ordered Fréchet spaces—dispensing entirely with the assumption that the vector ordering of the commodity space is a lattice. The motivation comes from economic applications showing the need to bring within the scope of equilibrium theory vector orderings that are not lattices, which arise in the typical model of portfolio trading with missing options. The assumptions are on the primitives of the model. They are bounds on the marginals of non-linear prices and for -proper economies they are both sufficient and necessary. © 2004 Elsevier Inc. All rights reserved. JEL classification: C61; C62; D46; D51; G1