A Note on Stochastic Rationing Mechanisms
There are a couple of well-known unsatisfactory properties in the notion of effective demand defined by Benassy and one by Dreze. This is why recent authors in disequilibrium analysis study the stochastic rationing mechanism. Douglas Gale proved the existence of the equilibrium with stochastic rationing mechanism. However, Gale 's rationing mechanism requires an economic agent to know all the individual effective demands from the other agents. This creates the informational problem. Green examined a rationing scheme which depends only on the individual effective demand and the aggregate signals. However, he did not consider conditions on rationing mechanisms to show the existence of temporary equilibrium. The purpose of this paper is to show a couple of sufficient conditions for the existence of temporary equilibrium preserving all properties Green considered on rationing mechanisms. We also discuss the possibility of balancing demand and supply in realization instead of in the mean.
|Date of creation:||Jan 1979|
|Date of revision:|
|Publication status:||published as Ito, Takatoshi. "An Example of a Non-Walrasian Equilibrium with Stochastic Rationing at the Walrasian Equilibrium Prices." Economic Letters, Vol. 2,(1979), pp. 13-19.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Dreze, Jacques H, 1975. "Existence of an Exchange Equilibrium under Price Rigidities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(2), pages 301-20, June.
- Grandmont, Jean-Michel, 1977.
"Temporary General Equilibrium Theory,"
Econometric Society, vol. 45(3), pages 535-72, April.
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- Lars E. O. Svensson, 1980. "Effective Demand and Stochastic Rationing," Review of Economic Studies, Oxford University Press, vol. 47(2), pages 339-355.
- Seppo Honkapohja & Takatoshi Ito, 1979. "Non-Trivial Equilibrium in an Economy With Stochastic Rationing," NBER Working Papers 0322, National Bureau of Economic Research, Inc.
- Frank Hahn, 1978. "On Non-Walrasian Equilibria," Review of Economic Studies, Oxford University Press, vol. 45(1), pages 1-17.
- Futia, Carl A., 1977. "Excess supply equilibria," Journal of Economic Theory, Elsevier, vol. 14(1), pages 200-220, February.
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