The structure of equilibria in trading networks with frictions

Abstract

Several structural results for the set of competitive equilibria in trading networks with frictions are established: The lattice theorem, the rural hospitals theorem, the existence of side‐optimal equilibria, and a group‐incentive‐compatibility result hold with imperfectly transferable utility and in the presence of frictions. While our results are developed in a trading network model, they also imply analogous (and new) results for exchange economies with combinatorial demand and for two‐sided matching markets with transfers.