Microeconomic Theory with Respect to Indivisibilities

Indivisible goods and factors constitute a subject of economic theory associated with a series of unsolved problems. Even advanced works on microeconomic theory like Varian (1992) or Jehle (1991) refrain from the consideration of indivisible goods and factors to provide a structure for the analysis where relatively simple mathematical methods can be applied. The Handbook of Mathematical Economics also does not contain any approach treating explicitly the integer problem. While Green, Heller (1981) present the instrument of convex analysis with respect to economic applications in the first chapter, a corresponding work dealing with the indivisibility of goods and factors is missing. Even in Brown (1991), who introduces an equilibrium analysis with nonconvex technologies in Chapter 36, the problem of indivisibility is merely of minor importance.