Discrete convexity and equilibria in economies with indivisible goods and money

We consider a production economy with many indivisible goods and one perfectly divisible good. The aim of the paper is to provide some light on the reasons for which equilibrium exists for such an economy. It turns out, that a main reason for the existence is that supplies and demands of indivisible goods should be sets of a class of discrete convexity. The class of generalized polymatroids provides one of the most interesting classes of discrete convexity. (C) 2001 Published by Elsevier Science B.V.