This paper extends the notion of valuation equilibrium which applies to market economies involving the choice of a public environment. Unlike some other recent work, it is assumed here that consumers and firms evaluate alternative environments taking market prices as given (hence this notion is...

This paper considers market economies involving the choice of a public environment when there are nonconvexities in production. It discusses the decentralization of efficient allocations by means of valuation equilibrium, adapting to many private goods the notion due to Mas-Colell (1980) which...