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Market clearing and price formation

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  • Flåm, S.D.
  • Godal, O.

Abstract

Considered here is decentralized exchange of privately owned commodity bundles. Voluntary transactions take the form of repeated bilateral barters. Under broad and reasonable hypotheses the resulting process converges to competitive equilibrium. Price-taking behavior is not assumed. Prices emerge over time; they need neither be anticipated nor known at any interim stage.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 32 (2008)
Issue (Month): 3 (March)
Pages: 956-977

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Handle: RePEc:eee:dyncon:v:32:y:2008:i:3:p:956-977

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