Stochastic stability in the Scarf economy
AbstractWe present a mathematical model for the analysis of the bargaining games based on private prices used by Gintis to simulate the dynamics of prices in exchange economies, see [Gintis 2007]. We then characterize, in the Scarf economy, a class of dynamics for which the Walrasian equilibrium is the only stochastically stable state. Hence, we provide dynamic foundations for general equilibrium for one of the best-known example of instability of the tâtonement process.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 12066.
Length: 14 pages
Date of creation: Oct 2012
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Other versions of this item:
- Antoine Mandel & Herbert Gintis, 2012. "Stochastic stability in the Scarf economy," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00748328, HAL.
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