Stochastic stability in the Scarf economy
We present a mathematical model for the analysis of the bargaining games based on private prices used by Gintis to simulate the dynamics of prices in exchange economies, see [Gintis 2007]. We then characterize, in the Scarf economy, a class of dynamics for which the Walrasian equilibrium is the only stochastically stable state. Hence, we provide dynamic foundations for general equilibrium for one of the best-known example of instability of the tâtonement process.
|Date of creation:||Oct 2012|
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|Publication status:||Published in Documents de travail du Centre d'Economie de la Sorbonne 2012.66 - ISSN : 1955-611X. 2012|
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