Abstract:A prevalent theme in the economics and computation literature is to identify natural price-adjustment processes by which sellers and buyers in a market can discover equilibrium prices. An example of such a process is tâtonnement, an auction-like algorithm first proposed in 1874 by French economist Walras in which sellers adjust prices based on the Marshallian demands of buyers, i.e., budget-constrained utility-maximizing demands. A dual concept in consumer theory is a buyer's Hicksian demand, i.e., consumption… Show more
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