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Convergence of iterative tâtonnement without price normalization

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  • Kitti, Mitri

Abstract

This paper presents global convergence conditions for a non-normalized fixed-point iteration in computing the equilibria of exchange economies. The usual conditions for the stability of Walras' tâtonnement are obtained as a limiting case from these conditions. The iteration leads to an equilibrium under a strengthened form of the weak axiom of revealed preferences introduced in the paper. Results for economies with global gross substitutability and no trade at equilibrium are also presented. Furthermore, it is shown that a rather general class of non-normalized iterations converges under the same conditions as the fixed-point iteration.

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  • Kitti, Mitri, 2010. "Convergence of iterative tâtonnement without price normalization," Journal of Economic Dynamics and Control, Elsevier, vol. 34(6), pages 1077-1091, June.
    • Handle: RePEc:eee:dyncon:v:34:y:2010:i:6:p:1077-1091
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    References listed on IDEAS

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    Cited by:

    1. Shu-Heng Chen & Bin-Tzong Chie & Ying-Fang Kao & Ragupathy Venkatachalam, 2019. "Agent-Based Modeling of a Non-tâtonnement Process for the Scarf Economy: The Role of Learning," Computational Economics, Springer;Society for Computational Economics, vol. 54(1), pages 305-341, June.
    2. Mathieu Moslonka-Lefebvre & Herv'e Monod & Christopher A. Gilligan & Elisabeta Vergu & Jo~ao A. N. Filipe, 2013. "Epidemics in markets with trade friction and imperfect transactions," Papers 1310.6320, arXiv.org.

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