Walrasian Allocations without Price-Taking Behavior
Consider an exchange economy where agents are arbitragers, in that they try to upset allocations imagining plausible beneficial trades. With an introspective algorithm, each agent constructs an interactive choice set (ICS), i.e., a set of bundles that he considers achievable through a sequence of plausible trades with other agents. We show that Walrasian allocations can be characterized as those where each agent chooses optimally from his ICS, which is always contained in a budget set (with differentiability, both sets coincide). Our analysis provides a different behavioral assumption underlying Walrasian allocations, offers an explanation for the source of competitive prices, and connects with the core convergence theorem.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nir Dagan & Roberto Serrano & Oscar Volij, 2000.
"Bargaining, coalitions and competition,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(2), pages 279-296, March.
- Nir Dagan & Roberto Serrano & Oscar Volij, 1996. "Bargaining, Coalitions, and Competition," Economic theory and game theory 003, Oscar Volij, revised Jul 1998.
- Volij, Oscar & Serrano, Roberto, 2000. "Bargaining, Coalitions and Competition," Staff General Research Papers Archive 5107, Iowa State University, Department of Economics.
- Nir Dagan & Roberto Serrano & Oscar Volij, 1996. "Bargaining, Coalitions, and Competition," Economic theory and game theory 014, Nir Dagan, revised May 1999.
- Nir Dagan & Roberto Serrano & Oscar Volij, 1996. "Bargaining, coalitions and competition," Economics Working Papers 178, Department of Economics and Business, Universitat Pompeu Fabra.
- Dubey, Pradeep & Mas-Colell, Andreau & Shubik, Martin, 1980. "Efficiency properties of strategies market games: An axiomatic approach," Journal of Economic Theory, Elsevier, vol. 22(2), pages 339-362, April.
- Schmeidler, David, 1980. "Walrasian Analysis via Strategic Outcome Functions," Econometrica, Econometric Society, vol. 48(7), pages 1585-1593, November.
- Dubey, Pradeep, 1982. "Price-Quantity Strategic Market Games," Econometrica, Econometric Society, vol. 50(1), pages 111-126, January.
- Pradeep Dubey, 1979. "Price-Quantity Strategic Market Games," Cowles Foundation Discussion Papers 520, Cowles Foundation for Research in Economics, Yale University.
- L. Hurwicz, 1979. "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 217-225.
- Nir Dagan, 1994. "Recontracting and competition," Economics Working Papers 152, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 1996.
- Nir Dagan, 1996. "Recontracting and Competition," Economic theory and game theory 013, Nir Dagan, revised Jun 1996.
- Gale, Douglas M, 1986. "Bargaining and Competition Part I: Characterization," Econometrica, Econometric Society, vol. 54(4), pages 785-806, July.
- Schmeidler, David & Vind, Karl, 1972. "Fair Net Trades," Econometrica, Econometric Society, vol. 40(4), pages 637-642, July.
- SCHMEIDLER, David & VIND, Karl, "undated". "Fair net trades," CORE Discussion Papers RP 131, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- McLennan, Andrew & Sonnenschein, Hugo, 1991. "Sequential Bargaining as a Noncooperative Foundation for Walrasian Equilibrium," Econometrica, Econometric Society, vol. 59(5), pages 1395-1424, September.
- Monderer, Dov & Samet, Dov, 1989. "Approximating common knowledge with common beliefs," Games and Economic Behavior, Elsevier, vol. 1(2), pages 170-190, June.
- Robert J Aumann, 1999. "Agreeing to Disagree," Levine's Working Paper Archive 512, David K. Levine. Full references (including those not matched with items on IDEAS)