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Robustness of Walrasian Tâtonnement in Locally Identifying an Equilibrium
| Content Provider | Semantic Scholar |
|---|---|
| Author | Jofré, Alejandro Rockafellar, R. Tyrrell |
| Copyright Year | 2011 |
| Abstract | It is widely believed that classical schemes of tâtonnement, in which prices are systematically lowered for goods in excess supply but raised for goods in excess demand, are inadequate for achieving equilibrium in basic models of exchange with a satisfying degree of generality. Well known examples reveal a lack of convergence even if the process is initiated with prices arbitrarily near to equilibrium prices. However, the examples involve initial supplies and demands that are seriously out-of-kilter, and they do not answer the question of what might be expected if such were not the case. Here it is shown, under relatively mild economic assumptions, that tâtonnement always works, not just generically, when goods as well as prices start out close enough to an equilibrium configuration. The developments lead beyond tâtonnement to the formulation of dynamical equations which capture how equilibrium prices should evolve in response to incremental additions to, or subtractions from, the agents’ equilibrium holdings. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://carma.newcastle.edu.au/jonfest/AbstractBook.pdf |
| Alternate Webpage(s) | https://carma.newcastle.edu.au/jonfest/AbstractBook.pdf |
| Alternate Webpage(s) | http://www.math.washington.edu/~rtr/papers/rtr-Tatonnement.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
