A Locally Stable Adjustment Process

Mukherji, Anjan

doi:10.2307/2951634

Cited by 11 publications

(7 citation statements)

References 2 publications

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“…Many studies of experimental markets show that markets tend to "equilibrate" at a pattern of prices and allocations that are near the equilibrium of the fictional Walrasian auctioneer. 2 Previous experiments lend support to the principles of equilibrium and the role of excess demand underlying dynamic price formation in the classical competitive model. Researchers have demonstrated the continuous double auction's convergence toward the competitive equilibrium prices and allocation is a reliable property of markets under a wide range of environments (Plott and Smith, 2008).…”

Section: Introductionmentioning

confidence: 84%

Divergence and convergence in Scarf cycle environments: experiments and predictability in the dynamics of general equilibrium systems

Gillen

Hirota²,

Hsu

et al. 2020

Econ Theory

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Previous experimental work demonstrates the power of classical theories of economic dynamics to accurately characterize equilibration in multiple market systems. Building on the literature, this study examines the behavior of experimental continuous double auction markets in convergence-challenging environments identified by Scarf (1960) and Hirota (1981). The experiments provide insight into two important economic questions: (a) do markets necessarily converge to a unique interior equilibrium? and (b) which model, among a set of classical specifications, most accurately characterizes observed price dynamics? We observe excess demand driven prices spiraling outwardly away from the interior equilibrium prices as predicted by the theory of disequilibrium price dynamics. We estimate a structural model establishing that partial equilibrium dynamics characterize price changes even in an unstable general equilibrium environment. We observe linkages between excess demand in one market and price changes in another market but the sign of expected price change in a market does not depend on the magnitude of excess demand in other markets unless disequilibrium is severe.

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Section: Introductionmentioning

confidence: 84%

Divergence and convergence in Scarf cycle environments: experiments and predictability in the dynamics of general equilibrium systems

Gillen

Hirota²,

Hsu

et al. 2020

Econ Theory

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“…Sexto, o postulado P implica o teorema T. E fica estabelecida a forma de realização do edifício da teoria do equilíbrio geral quando da passagem das economias na versão Walras-Hicks- Samuelson-Metzler (1945) -Lange (1944, para a economia Arrow & Debreu nos anos 50 (Hahn 1958(Hahn ,1961Negishi 1958Negishi , 1961Negishi , 1962Walker 1987;Mukherji 1973Mukherji , 1995.…”

Section: Cenário Analíticounclassified

“…Como uma maneira de contornar esta situação, foram elaborados inúmeros trabalhos que contribuíram de forma decisiva para recuperar o prestígio do processo de ajustamento ortodoxo, porém, não mais utilizando-se hipóteses generalistas, e sim, estudos de casos. Destacam-se: Uzawa (1960Uzawa ( , 1961Uzawa ( , 1962; Arrow (1961Arrow ( , 1962Arrow ( , 1971; Quirk (1970); Habibagahi e Quirk (1973); Hotaka (1971); Gordon (1974); Smale (1976);Tarr (1978); Kamyia (1990) e Mukherji (1973Mukherji ( , 1995.…”

Section: Scarf E O Ataque Frontal Ao Tâtonnementunclassified

Teoria da estabilidade do equilíbrio competitivo em mercado múltiplo numa economia Arrow & Debreu

Farias¹

2010

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Este artigo tem por objetivo expor o debate contemporâneo sobre ascontribuições principais à teoria da estabilidade do equilíbrio competitivo emuma economia submetida a processos diversos de ajustamento: Tâtonnement eNonTâtonnement. Discutimos os principais resultados estabelecidos pelos autorespertinentes a literatura sobre a teoria da estabilidade do equilíbrio walrasiano.Enunciamos e discutimos alguns dos principais teoremas. E primando pela didáticarealizamos exemplos numéricos, quando pertinentes, alguns não estabelecidos nosartigos originais e mesmo nos textos didáticos. Realizamos comentários pertinentesaos modelos apresentados, extraídos da literatura original.

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“…With the intertemporal coordination dynamics studied here, the price adjustment process is pinned down by what is assumed to be common knowledge, while with tatonnement in spot prices the price adjustment process has no such justification. 5 Simillar comments apply to tatonnement stability(Arrow and Hahn, 1971;Mukherji, 1995): with tatonnement stability the price adjustment process has no common knowledge justification and the sufficient conditions for the stability of tatonnement dynamics, like gross substitutability or diagonal dominance, donot ensure the eductive stability of PFE.6 Throughout the paper, the bold face type will be used to denote an assignment, with the ith component of the assignment g denoted by g i and the kth coordinate of the assignment g denoted by g k . 7 Note that when L 2 = 1, with only one commodity at t = 2, the coordination problem in second period spot markets studied here disappears.…”

mentioning

confidence: 99%

Intertemporal coordination in two-period markets

Ghosal¹

2006

Journal of Mathematical Economics

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A Locally Stable Adjustment Process

Cited by 11 publications

References 2 publications

Divergence and convergence in Scarf cycle environments: experiments and predictability in the dynamics of general equilibrium systems

Divergence and convergence in Scarf cycle environments: experiments and predictability in the dynamics of general equilibrium systems

Teoria da estabilidade do equilíbrio competitivo em mercado múltiplo numa economia Arrow & Debreu

Intertemporal coordination in two-period markets

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