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Discrete Walrasian exchange process

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  • Jean-Marc Bonnisseau

    ()

  • Orntangar Nguenamadji

    ()

Abstract

In an exchange economy, we define a discrete exchange process, which is Walrasian, since the trades are determined by the equilibrium allocation of the local equilibrium. We prove that this process attains a Pareto optimal allocation after a finite number of steps and the local equilibrium price then supports the Pareto optimal allocation. Furthermore, along the process, the allocation remains feasible and the utility of each consumer is non-decreasing. Copyright Springer-Verlag 2013

Suggested Citation

  • Jean-Marc Bonnisseau & Orntangar Nguenamadji, 2013. "Discrete Walrasian exchange process," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(3), pages 1091-1100, April.
  • Handle: RePEc:spr:joecth:v:52:y:2013:i:3:p:1091-1100 DOI: 10.1007/s00199-011-0682-y
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    References listed on IDEAS

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    1. Mas-Colell,Andreu, 1990. "The Theory of General Economic Equilibrium," Cambridge Books, Cambridge University Press, number 9780521388702, November.
    2. Smale, Stephen, 1976. "Exchange processes with price adjustment," Journal of Mathematical Economics, Elsevier, vol. 3(3), pages 211-226, December.
    3. Sean Crockett, 2008. "Learning competitive equilibrium in laboratory exchange economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 157-180.
    4. CHANDER, Parkash & TULKENS, Henry, 1990. "Exchange processes, the core and competitive allocations," CORE Discussion Papers 1990003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Bonnisseau, Jean-Marc & Nguenamadji, Orntangar, 2010. "On the uniqueness of local equilibria," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 623-632, September.
    6. Yves Balasko, 2007. "Out-of-equilibrium price dynamics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 413-435.
    7. Bottazzi, Jean-Marc, 1994. "Accessibility of Pareto optima by Walrasian exchange processes," Journal of Mathematical Economics, Elsevier, vol. 23(6), pages 585-603, November.
    8. Mertens, J. F., 2003. "The limit-price mechanism," Journal of Mathematical Economics, Elsevier, vol. 39(5-6), pages 433-528, July.
    9. Crockett, Sean & Spear, Stephen & Sunder, Shyam, 2008. "Learning competitive equilibrium," Journal of Mathematical Economics, Elsevier, vol. 44(7-8), pages 651-671, July.
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    Cited by:

    1. Bonnisseau, Jean-Marc & Nguenamadji, Orntangar, 2010. "On the uniqueness of local equilibria," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 623-632, September.
    2. Gaël Giraud & Nguenamadji Orntangar, 2011. "Monetary policy under finite speed of trades and myopia," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00609824, HAL.

    More about this item

    Keywords

    Exchange process; Walrasian equilibrium; Local equilibrium; Pareto optimum; C62; D50; D62;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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