Re: DSE 2012

Posted by Dreyfus on Jun 24, 2014; 5:16pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2012-tp7593497p7593504.html

The contract curve will remain intact when utility functions are monotonically tranformed, you can see this by letting agents preferences be smooth nd convex so that their MRS's will yeild contract that will be an entire diagnol joining agent's origin. Now if u take monotonically transformed utility function then MRS will remain intact so does the contract curve!
But if endowment changes then dimension of Edgeworth will change thus contract curve will get affected.