Egoism

Egoism

General Equilibrium is the general theory of free, competitive markets with

rational, self–interested agents

The Big Theorems

Existence

First Welfare Theorem: Equilibrium Allocations are efficient

...in the core, even

Second Welfare Theorem: efficient allocations can be implemented

via free markets and lump–sum transfers

Core–Equivalence: in large economies, the outcome of rational

cooperation (core) is close to market outcomes