IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpge/9802003.html
   My bibliography  Save this paper

Uniqueness, Stability, and Comparative Statics in Rationalizable Walrasian Markets

Author

Listed:
  • Donald J. Brown

    (Department of Economics, Yale University)

  • Chris Shannon

    (Department of Economics, University of California, Berkeley)

Abstract

This paper studies the extent to which qualitative features of Walrasian equilibria are refutable given a finite data set. In particular, we consider the hypothesis that the observed data are Walrasian equilibria in which each price vector is locally stable under tatonnement. Our main result shows that a finite set of observations of prices, individual incomes and aggregate consumption vectors is rationalizable in an economy with smooth characteristics if and only if it is rationalizable in an economy in which each observed price vector is locally unique and stable under tatonnement. Moreover, the equilibrium correspondence is locally monotone in a neighborhood of each observed equilibrium in these economies. Thus the hypotheses that equilibria are locally stable under tatonnement, equilibrium prices are locally unique and equilibrium comparative statics are locally monotone are not refutable with a finite data set.

Suggested Citation

  • Donald J. Brown & Chris Shannon, 1998. "Uniqueness, Stability, and Comparative Statics in Rationalizable Walrasian Markets," GE, Growth, Math methods 9802003, University Library of Munich, Germany, revised 02 Mar 1998.
  • Handle: RePEc:wpa:wuwpge:9802003
    Note: LaTex .dvi, This is an version updated Feb 1998.
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/9802/9802003.pdf
    Download Restriction: no

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/9802/9802003.ps.gz
    Download Restriction: no

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/9802/9802003.dvi.gz
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. John K.-H. Quah, 2000. "The Monotonicity of Individual and Market Demand," Econometrica, Econometric Society, vol. 68(4), pages 911-930, July.
    2. Chiappori, Pierre-Andre & Rochet, Jean-Charles, 1987. "Revealed Preferences and Differentiable Demand: Notes and Comments," Econometrica, Econometric Society, vol. 55(3), pages 687-691, May.
    3. Mas-Colell, Andreu, 1977. "On the equilibrium price set of an exchange economy," Journal of Mathematical Economics, Elsevier, vol. 4(2), pages 117-126, August.
    4. Brown, Donald J & Matzkin, Rosa L, 1996. "Testable Restrictions on the Equilibrium Manifold," Econometrica, Econometric Society, vol. 64(6), pages 1249-1262, November.
    5. Herbert E. Scarf, 1959. "Some Examples of Global Instability of the Competitive Equilibrium," Cowles Foundation Discussion Papers 79, Cowles Foundation for Research in Economics, Yale University.
    6. A. P. Kirman & K. J. Koch, 1986. "Market Excess Demand in Exchange Economies with Identical Preferences and Collinear Endowments," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 457-463.
    Full references (including those not matched with items on IDEAS)

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpge:9802003. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.