Prices for homogeneous cost functions

Leonard J. Mirman*, Abraham Neyman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The problem of allocating the production cost of a finite bundle of infinitely divisible consumption goods by means of prices is a basic problem in economics. This paper extends the recent axiomatic approach in which one considers a class of cost problems and studies the maps from the class of cost problems to prices by means of the properties these prices satisfy. The class of continuously differentiable costs functions used in previous studies is narrowed to the subclass containing non-decreasing, homogeneous of degree one and convex functions. On this subclass it is shown that there exists a unique continuous price mechanism satisfying axioms similar to those assumed in previous studies.

Original languageEnglish
Pages (from-to)257-273
Number of pages17
JournalJournal of Mathematical Economics
Volume12
Issue number3
DOIs
StatePublished - Dec 1983

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