Convergence of Double Auctions to Pareto Optimal Allocations in the Edgeworth Box
AbstractDouble auctions with profit-motivated human traders as well as "zero-intelligence" programmed traders have previously been shown to converge to Pareto optimal allocations in partial equilibrium settings. We show that these results remain robust in two-good general equilibrium settings and elucidate how market structure, not optimization by traders, guides efficient resource allocation.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number amz2518.
Date of creation: 01 Jun 2004
Date of revision: 01 Apr 2008
Pareto optimal allocations; Edgeworth Box; Double auction; Zero-intelligence traders;
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