Microeconomics and the First Welfare Theorem


Title: Microeconomics and the First Welfare Theorem
Authors: Julian Parsert (julian /dot/ parsert /at/ gmail /dot/ com) and Cezary Kaliszyk
Submission date: 2017-09-01
Abstract: Economic activity has always been a fundamental part of society. Due to modern day politics, economic theory has gained even more influence on our lives. Thus we want models and theories to be as precise as possible. This can be achieved using certification with the help of formal proof technology. Hence we will use Isabelle/HOL to construct two economic models, that of the the pure exchange economy and a version of the Arrow-Debreu Model. We will prove that the First Theorem of Welfare Economics holds within both. The theorem is the mathematical formulation of Adam Smith's famous invisible hand and states that a group of self-interested and rational actors will eventually achieve an efficient allocation of goods and services.
  author  = {Julian Parsert and Cezary Kaliszyk},
  title   = {Microeconomics and the First Welfare Theorem},
  journal = {Archive of Formal Proofs},
  month   = sep,
  year    = 2017,
  note    = {\url{http://isa-afp.org/entries/First_Welfare_Theorem.html},
            Formal proof development},
  ISSN    = {2150-914x},
License: GNU Lesser General Public License (LGPL)
Status: [ok] This is a development version of this entry. It might change over time and is not stable. Please refer to release versions for citations.