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The WALRAS Algorithm: A Convergent Distributed Implementation of General Equilibrium Outcomes

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  • Cheng, John Q
  • Wellman, Michael P

Abstract

The WALRAS algorithm calculates competitive equilibria via a distributed tatonnement-like process, in which agents submit single-good demand functions to market-clearing auctions. The algorithm is asynchronous and decentralized with respect to both agents and markets, making it suitable for distributed implementation. We present a formal description of this algorithm, and prove that it converges under the standard assumption of gross substitutability. We relate our results to the literature on general equilibrium stability and some more recent work on decentralized algorithms. We present some experimental results as well, particularly for cases where the assumptions required to guarantee convergence do not hold. Finally, we consider some extensions and generalizations to the WALRAS algorithm. Citation Copyright 1998 by Kluwer Academic Publishers.

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Bibliographic Info

Article provided by Society for Computational Economics in its journal Computational Economics.

Volume (Year): 12 (1998)
Issue (Month): 1 (August)
Pages: 1-24

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Handle: RePEc:kap:compec:v:12:y:1998:i:1:p:1-24

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  1. Stanley Reiter & Carl P. Simon, 1990. "Decentralized Dynamic Processes for Finding Equilibrium," Discussion Papers 865, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  2. Chipman, John S., 1974. "Homothetic preferences and aggregation," Journal of Economic Theory, Elsevier, vol. 8(1), pages 26-38, May.
  3. Hildenbrand, Werner, 1983. "On the "Law of Demand."," Econometrica, Econometric Society, vol. 51(4), pages 997-1019, July.
  4. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521319867.
  5. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-99, September.
  6. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
  7. Milgrom, Paul & Roberts, John, 1991. "Adaptive and sophisticated learning in normal form games," Games and Economic Behavior, Elsevier, vol. 3(1), pages 82-100, February.
  8. Shafer, Wayne & Sonnenschein, Hugo, 1993. "Market demand and excess demand functions," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 14, pages 671-693 Elsevier.
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Cited by:
  1. Bill Gibson, 2007. "A Multi-Agent Systems Approach to Microeconomic Foundations of Macro," UMASS Amherst Economics Working Papers 2007-10, University of Massachusetts Amherst, Department of Economics.
  2. Sandholm, Tuomas W. & Lesser, Victor R., 2001. "Leveled Commitment Contracts and Strategic Breach," Games and Economic Behavior, Elsevier, vol. 35(1-2), pages 212-270, April.
  3. Nielsen, Kurt, 2005. "Auctioning Payment Entitlements," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24566, European Association of Agricultural Economists.
  4. William E. Walsh & Michael P. Wellman, 1999. "Efficiency and Equilibrium in Task Allocation Economics with Hierarchical Dependencies," Working Papers 99-07-049, Santa Fe Institute.
  5. Kurt Nielsen & Jesper Troelsgaard Nielsen, 2010. "An Allocatively Efficient Auction Market for Payment Entitlements?," MSAP Working Paper Series 03_2010, University of Copenhagen, Department of Food and Resource Economics.
  6. Eymann, Torsten & Streitberger, Werner & Reinicke, Michael & Freitag, Felix & Chacin, Pablo & Chao, Isaac & Schnizler, Björn & Veit, Daniel, 2007. "Preliminary specification and design documentation for software components to achieve catallaxy in computational systems," Bayreuth Reports on Information Systems Management 2, University of Bayreuth, Chair of Information Systems Management.
  7. Wurman, Peter R. & Wellman, Michael P. & Walsh, William E., 2001. "A Parametrization of the Auction Design Space," Games and Economic Behavior, Elsevier, vol. 35(1-2), pages 304-338, April.

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