Computing the Evolution of Walrasian Behaviour

Gonzalo Fernandez-de-Cordoba and Álvaro P. Navas ()
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Álvaro P. Navas: UAV Navigation SL

Chapter 6 in Complexity and Artificial Markets, 2008, pp 67-76 from Springer

Abstract: Abstract The main solution concept in economics is the Walrasian equilibrium. However, Walrasian theory builds upon the central hypothesis of price taking behaviour of the agents of the economy. This hypothesis precludes strategic behaviour of manipulating prices in the agent’s own advantage, and it is usually linked to the intuition that in an economy with a large number of atomless agents, their ability of manipulating prices is negligible. Results of convergence to the Walrasian equilibrium with a low number of firms have been much celebrated. In this paper we show that without imitation or mutation, but with sensible behavioural rules, it is possible to design an artificial economy, where a low number of firms can attain the Walrasian allocation in finite time, and much more.

Keywords: Demand Function; Behavioural Rule; Walrasian Equilibrium; Social Simulation; Constant Marginal Cost (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-540-70556-7_6

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DOI: 10.1007/978-3-540-70556-7_6

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