Content:
The existence of an equilibrium in an extended Walrasian economic model of exchange is confirmed constructively by an iterative scheme. In this scheme, truncated variational inequality problems are solved in which the agents' budget constraints are relaxed by a penalty representation. Epi-convergence arguments are employed to show that, in the limit, an equilibrium of the targeted type is obtained. A number of major technical hurdles are, in this way, surmounted.
July 2003