Randon, E. (contributor); Simmons, Peter J. (contributor) - 2008
at a given price is lower in a market
equilibrium than in a Pareto optimum, if the externalities are detrimental, or it … for Pareto optimality are sufficient, and so the Nash-market equilibrium
is a Pareto optimum. Thus in this scenario the …
h
(x
h
,x
k
)+u
k
(x
k
,x
h
)
without any constraint. So the FOC for a Pareto optimum is
∂u
h
(x
h
,x
k
)
∂x
h
+
∂u
k
(x …