On a General Existence Theorem for Marginal Cost Pricing Equilibria
We report a generalization of recent results on the existence of marginal cost pricing equilibria (MCPE) in economies with an increasing returns to scale industry. Our result makes no ad hoc assumptions which force the equilibrium to be on the eﬀiciency frontier of the aggregate production possibility set. We also present an additional condition under which our MCPE are productivity eﬀicient in the aggregate.
Brown, Donald J.; Heal, Geoffrey M.; Khan, M. Ali; and Vohra, Rajiv, "On a General Existence Theorem for Marginal Cost Pricing Equilibria" (1984). Cowles Foundation Discussion Papers. 964.