## Arrow–Debreu model of general equilibrium

From The New Palgrave Dictionary of Economics, Second Edition, 2008

Edited by
Steven
N.
Durlauf
and
Lawrence
E.
Blume

Alternate versions available:
1987 Edition

Back to top

Back to top
### Abstract

In the 1950s Kenneth Arrow and Gerard Debreu showed that the market system could be comprehensively analysed in terms of the neoclassical methodological premises of individual rationality, market clearing, and rational expectations, using the two mathematical techniques of convexity and fixed point theory. In so doing they greatly advanced the use of mathematics in economics.

### Keywords

agent optimization; Arrow–Debreu model of general equilibrium; asymmetric information; bankruptcy; bounded rationality; Brouwer's fixed point theorem; coalitions; commodities; comparative statics; competitive equilibrium; consumption loan model; convexity; core; Cournot's duopoly model; differential pay principle; existence of equilibrium; externalities; Fixed point theorems; general equilibrium; Hicks, J. R.; incomplete markets; individualism; insurance markets; interpersonal utility comparisons; Kakutani's fixed point theorem; Lindahl equilibrium; local uniqueness; market clearing; mathematical economics; mathematics and economics; microfoundations; Minkowski's theorem; monotonicity; negative prices; neoclassical economics; neoclassical production function; non-satiation hypothesis; ordinal utility; overlapping generations model; Pareto optimality; preference; price; rational expectations; rational expectations equilibrium; rationality; risk allocation; Samuelson, P. A.; Sard's theorem; separating hyperplane theorem; tâtonnement; transversality theory; uncertainty; utility; Walras's Law; welfare economics; welfare theorems

Back to top

Back to top
### See Also

### How to cite this article

Geanakoplos, John. "Arrow–Debreu model of general equilibrium." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 21 December 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_A000133> doi:10.1057/9780230226203.0059