The Existence and Computation of Equilibria with Increasing Returns and Externalities

This paper proves the existence of general economic equilibrium in a class of general equilibrium models where there may be increasing returns to scale in some industries, and in which both production and consumption decisions may be influenced by the level of production in some industries. The major difference between models of this class and standard Walrasian models is that the auctioneer is allowed to quote quantities as well as prices. The principal mathematical result used is Sperner's Lemma. Any Sperner algorithm may therefore be used to calculate equilibria for models of this class.