Section 6
The Edgeworth Box, Live
Below is the Edgeworth box for the current parameters. Agent A's consumption is measured from the lower-left origin (); B's mirror-image consumption is measured from the upper-right (). The shaded lens is the set of allocations that make both agents weakly better off than at the endowment. The contract curve passes through every Pareto-efficient allocation; the highlighted segment is the core — the subset that is also individually rational. The equilibrium allocation is where the budget line is tangent to both indifference curves.
Edgeworth box
Equilibrium summary
No scalar found for key: equilibrium_price_ratio
No scalar found for key: x_a1_star
No scalar found for key: x_a2_star
No scalar found for key: x_b1_star
No scalar found for key: x_b2_star
Gains from trade
Trade leaves both agents weakly better off — that is the content of individual rationality. Compare the utility each agent had at their endowment to the utility they reach at the Walrasian allocation.
No scalar found for key: utility_a_initial
No scalar found for key: utility_a_equilibrium
No scalar found for key: utility_b_initial
No scalar found for key: utility_b_equilibrium