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Decentralized Pricing and the equivalence between Nash and Walrasian equilibrium

Author

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  • Antoine Mandel

    () (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)

  • Herbert Gintis

    (Santa Fe Institute)

Abstract

We introduce, in the standard exchange economy model, market games in which agents use private prices as strategies. We give conditions on the game form that ensure that the only strict Nash equilibria of the game are the competitive equilibria of the underlying economy. This equivalence result has two main corollaries. First, it adds to the evidence that competitive equilibria can be strategically stable even in small economies. Second, it implies that competitive equilibria have good local stability properties under a large class of evolutionary learning dynamics.

Suggested Citation

  • Antoine Mandel & Herbert Gintis, 2016. "Decentralized Pricing and the equivalence between Nash and Walrasian equilibrium," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-01296646, HAL.
  • Handle: RePEc:hal:pseose:halshs-01296646
    DOI: 10.1016/j.jmateco.2015.12.008
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01296646
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    References listed on IDEAS

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    Keywords

    General equilibrium; Market games; Stability; Computational economics; Evolutionary game theory;

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