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A Note on Stochastic Rationing Mechanisms

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  • Takatoshi Ito

Abstract

There are a couple of well-known unsatisfactory properties in the notion of effective demand defined by Benassy and one by Dreze. This is why recent authors in disequilibrium analysis study the stochastic rationing mechanism. Douglas Gale proved the existence of the equilibrium with stochastic rationing mechanism. However, Gale 's rationing mechanism requires an economic agent to know all the individual effective demands from the other agents. This creates the informational problem. Green examined a rationing scheme which depends only on the individual effective demand and the aggregate signals. However, he did not consider conditions on rationing mechanisms to show the existence of temporary equilibrium. The purpose of this paper is to show a couple of sufficient conditions for the existence of temporary equilibrium preserving all properties Green considered on rationing mechanisms. We also discuss the possibility of balancing demand and supply in realization instead of in the mean.

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File URL: http://www.nber.org/papers/w0313.pdf
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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0313.

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Date of creation: Jan 1979
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Publication status: published as Ito, Takatoshi. "An Example of a Non-Walrasian Equilibrium with Stochastic Rationing at the Walrasian Equilibrium Prices." Economic Letters, Vol. 2,(1979), pp. 13-19.
Handle: RePEc:nbr:nberwo:0313

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  1. Grandmont, Jean-Michel, 1993. "Temporary general equilibrium theory," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 19, pages 879-922 Elsevier.
  2. Svensson, Lars E O, 1980. "Effective Demand and Stochastic Rationing," Review of Economic Studies, Wiley Blackwell, vol. 47(2), pages 339-55, January.
  3. Varian, Hal R, 1977. "Non-Walrasian Equilibria," Econometrica, Econometric Society, vol. 45(3), pages 573-90, April.
  4. Seppo Honkapohja & Takatoshi Ito, 1979. "Non-Trivial Equilibrium in an Economy With Stochastic Rationing," NBER Working Papers 0322, National Bureau of Economic Research, Inc.
  5. Dreze, Jacques H, 1975. "Existence of an Exchange Equilibrium under Price Rigidities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(2), pages 301-20, June.
  6. Hahn, Frank, 1978. "On Non-Walrasian Equilibria," Review of Economic Studies, Wiley Blackwell, vol. 45(1), pages 1-17, February.
  7. Futia, Carl A., 1977. "Excess supply equilibria," Journal of Economic Theory, Elsevier, vol. 14(1), pages 200-220, February.
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