Trading networks with general preferences
We establish several structural results for the set of competitive equilibria in bilateral trading networks with transfers in the case of imperfectly transferable utility and frictions: The lattice theorem, the rural hospitals theorem, the existence of side-optimal equilibria, compactness of the set of equilibria and a group-incentive-compatibility result hold without the assumption of quasi-linear utility in transfers. Abstract: We establish several structural results for the set of competitive equilibria in bilateral trading networks with transfers in the case of imperfectly transferable utility and frictions: The lattice theorem, the rural hospitals theorem, the existence of side-optimal equilibria, compactness of the set of equilibria and a group-incentive-compatibility result hold without the assumption of quasi-linear utility in transfers. While our results are developed in a trading network model We consider general trading networks with bilateral contracts. We show that a suitably adapted chain stability concept is equivalent to stability if all agents' preferences are jointly fully