The invisible hand of Laplace: The role of market structure in price convergence and oscillation

Yuval Rabani and Leonard J. Schulman

Journal of Mathematical Economics, 2021, vol. 95, issue C

Abstract: The “invisible hand” of the free market is remarkably effective at producing near-equilibrium prices. This is difficult to quantify, however, in the absence of an agreed model for out-of-equilibrium trade. Short of a fully reductionist model, a useful substitute would be a scaling law relating equilibration time and other market parameters. Even this, however, is missing in the literature.

Keywords: Disequilibrium dynamics; Arrow-Debreu model; Tâtonnement; Fluctuation-dissipation theorem; Graph expansion; Graph spectrum (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:95:y:2021:i:c:s0304406821000136

DOI: 10.1016/j.jmateco.2021.102475

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