A Scarcity Theory of Value With Reflections on the Arrow Debreu Model

Value theory is the foundation of economic theory. Marginal utility theory value is the dominant value theory. Arrow Debreu model, which is built on the utility theory of value, forms the mathematical foundation of general equilibrium theory. But Arrow Debreu model doesn’t describe economic reality well. We present a mathematical theory of the scarcity theory of value. It describes economic activities accurately. In particular, it explains the importance of monopoly in economic and social life