In the Arrow–Debreu model of general economic equilibrium, agents are assumed to have convex budget sets and convex preferences. These assumptions of convexity in economics can be used to prove the existence of an equilibrium. When actual economic data is non-convex, it can be made convex by taking convex hulls. The Shapley–Folkman theorem can be used to show that, for large markets, this approximation is accurate, and leads to a "quasi-equilibrium" for the original non-convex market.. See in particular Section 16.9, Non Convexity and Approximate Equilibrium, pp. 209–210.
In the Arrow–Debreu model of general economic: equilibrium, agents are assumed to have convex budget sets and convex preferences. These assumptions of convexity in economics can be used to prove the existence of an equilibrium. When actual economic data is non-convex, it can be made convex by taking convex hulls. The Shapley–Folkman theorem can be used to show that, for large markets, this approximat!ion is accurate, and leads to a "quasi-equilibrium" for the original non-convex market.. See in particular Section 16.9, Non Convexity and Approximate Equilibrium, pp. 209–210.