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On convergence of contractual trajectories in pure exchange economies

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  • Marakulin Valery

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Abstract

The study is aimed to investigate the convergence to equilibrium of trajectories generated by contractual processes. “Contractual process” is a view on economy’s self-regulation, describing any state of exchange economy as a set of barter contracts among agents/coalitions. It is assumed that any moment of continuous time agents can partially break some contracts and sign more beneficial ones. Such reconstructing is called “benevolent”, when an agent/coalition breaks old contracts only when exhausting all other opportunities to increase welfare. Such processes are shown to con-verge to equilibrium under reasonable conditions, whereas non-benevolent processes need not converge, as shown by series of examples.

Suggested Citation

  • Marakulin Valery, 2006. "On convergence of contractual trajectories in pure exchange economies," EERC Working Paper Series 06-07e, EERC Research Network, Russia and CIS.
  • Handle: RePEc:eer:wpalle:06-07e
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    References listed on IDEAS

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    4. Mukherji, Anjan, 1995. "A Locally Stable Adjustment Process," Econometrica, Econometric Society, vol. 63(2), pages 441-448, March.
    5. Kunimoto, Takashi & Serrano, Roberto, 2004. "Bargaining and competition revisited," Journal of Economic Theory, Elsevier, vol. 115(1), pages 78-88, March.
    6. Jordan, J. S., 1983. "Locally stable price mechanisms," Journal of Mathematical Economics, Elsevier, vol. 11(3), pages 235-259, July.
    7. Marakulin Valery, 2003. "Contracts and domination in incomplete markets," EERC Working Paper Series 02-04e, EERC Research Network, Russia and CIS.
    8. Kamiya, Kazuya, 1990. "A Globally Stable Price Adjustment Process," Econometrica, Econometric Society, vol. 58(6), pages 1481-1485, November.
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    13. Mukherji, Anjan, 1974. "The Edgeworth-Uzawa Barter Stabilizes Prices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 236-241, February.
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    Cited by:

    1. Valery M. Marakulin, 2009. "Economies with Asymmetrically Informed Agents: the Concept of Limit Information," Journal of the New Economic Association, New Economic Association, issue 1-2, pages 62-85.
    2. Marakulin Valeriy, 2010. "Differential Information Economies: Contract based approach," EERC Working Paper Series 10/02e, EERC Research Network, Russia and CIS.

    More about this item

    Keywords

    Russia; core; contract; contractual allocation; contractual process (trajectory); tatonnement; competitive equilibrium;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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