Market clearing and price formation

Sjur Flåm and Odd Godal ()
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Odd Godal: INSTITUTE FOR RESEARCH IN ECONOMICS AND BUSINESS ADMINISTRATION, Postal: Breiviksveien 40, N-5045 Bergen, Norway

No 06/07, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: Considered here is decentralized exchange of privately owned commodity bundles. Voluntary transactions take the form of repeated bilateral barters. Under broad and reasonable hypotheses the resulting process converges to comepetitive equilibrium. Price-taking behavior is not assumed. Prices emerge over time; they need neither be anticipated nor known at any interim stage.

Keywords: exchange economies; price equilibrium; stochastic approximation. (search for similar items in EconPapers)
JEL-codes: C61 C72 C90 D51 D80 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2007-04-27
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Journal Article: Market clearing and price formation (2008)
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