An example of a non-Walrasian equilibrium with stochastic rationing at the Walrasian equilibrium prices

1979 ◽  
Vol 2 (1) ◽  
pp. 13-19 ◽  
Author(s):  
Takatoshi Ito
Keyword(s):  
Walrasian Equilibrium ◽  
Equilibrium Prices

Walrasian Equilibrium and Reputation under Imperfect Public Monitoring

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Bernardita Vial
Keyword(s):  
Steady State ◽  
Repeated Game ◽  
Walrasian Equilibrium ◽  
Steady State Distribution ◽  
State Distribution ◽  
High Quality ◽  
Price Function ◽  
Equilibrium Prices ◽  
Public Monitoring ◽  
Quality Production

This paper examines a reputation-based mechanism that sustains the provision of high quality in the presence of competition among providers, where the incentive for high-quality production comes from a reputation premium: firms with higher reputations charge higher prices. The way we model the market highlights the fact that prices are not solely determined from consumers' willingness to pay as in the monopolistic setting studied in the previous literature. In effect, equilibrium prices are determined endogenously, from the interaction of the distribution of consumers' valuations for high quality and the distribution of firms' reputations—the demand and the supply sides of the market, respectively. This paper shows that: (i) there is a steady-state distribution of reputations, a result that allows the study of a stationary equilibrium; (ii) there are parameter configurations for which the existence of a high-quality equilibrium is guaranteed, and where the incentives for high quality production in the repeated game depend on the shape of the price function; and (iii) the Walrasian-equilibrium price function depends on the shape of the steady-state distribution of reputations, and the assignment of consumers to firms with different reputation levels in such an equilibrium is positively assortative if quality is a normal good.

Pure exchange and general equilibrium

2020 ◽  
pp. 187-231
Author(s):  
David M. Kreps
Keyword(s):  
General Equilibrium ◽  
Walrasian Equilibrium ◽  
Equilibrium Prices ◽  
Pure Exchange

This chapter focuses on situations of pure exchange, where consumers wish to exchange bundles of goods they hold at the outset for other bundles they will subsequently consume. It uses this setting to introduce the theory of price-mediated market transactions and, more particularly, the theory of general equilibrium, in which all markets in all goods are considered simultaneously. Following in the footsteps of generations of classical microeconomists, the chapter makes the assertion that in many situations of pure exchange, the consumer will wind up at the consumption allocation part of some Walrasian equilibrium for the economy, and insofar as there are markets in these goods, prices will correspond to equilibrium prices. One thing that the concept of a Walrasian equilibrium does not provide is any sense of how market operates. There is no model here of who sets prices, or what gets exchanged for what, when, and where.

scholarly journals A speedy auction using approximated bidders’ preferences

2019 ◽  
Vol 288 (1) ◽  
pp. 65-93
Author(s):  
Jim Ingebretsen Carlson
Keyword(s):  
Complete Lattice ◽  
Preference Relation ◽  
Combinatorial Auction ◽  
Walrasian Equilibrium ◽  
Approximation Procedure ◽  
Price Vector ◽  
Equilibrium Prices ◽  
Simulation Results ◽  
The Difference ◽  
Completion Times

AbstractThis paper presents a combinatorial auction, which is of particular interest when short completion times are of importance. It is based on a method for approximating the bidders’ preferences over two types of item when complementarity between the two may exist. The resulting approximated preference relation is shown to be complete and transitive at any given price vector. It is shown that an approximated Walrasian equilibrium always exists if all bidders either view the items as substitutes or complements. If the approximated preferences of the bidders comply with the gross substitutes condition, then the set of approximated Walrasian equilibrium prices forms a complete lattice. A process is proposed that is shown to always reach the smallest approximated Walrasian price vector. Simulation results suggest that the approximation procedure works well as the difference between the approximated and true minimal Walrasian prices is small.

scholarly journals An Efficient Dynamic Auction for Heterogeneous Commodities

2006 ◽  
Vol 96 (3) ◽  
pp. 602-629 ◽  
Author(s):  
Lawrence M Ausubel
Keyword(s):  
Market Power ◽  
Walrasian Equilibrium ◽  
Commodity Market ◽  
Efficient Allocation ◽  
Dynamic Design ◽  
Equilibrium Prices ◽  
Groves Mechanism

This article proposes a new dynamic design for auctioning multiple heterogeneous commodities. An auctioneer wishes to allocate K types of commodities among n bidders. The auctioneer announces a vector of current prices, bidders report quantities demanded at these prices, and the auctioneer adjusts the prices. Units are credited to bidders at the current prices as their opponents' demands decline, and the process continues until every commodity market clears. Bidders, rather than being assumed to behave as price-takers, are permitted to strategically exercise their market power. Nevertheless, the proposed auction yields Walrasian equilibrium prices and, as from a Vickrey-Clarke-Groves mechanism, an efficient allocation.

Walrasian Equilibrium Problem with Memory Term

2011 ◽  
Vol 151 (1) ◽  
pp. 64-80 ◽  
Author(s):  
Maria Bernadette Donato ◽  
Monica Milasi ◽  
Laura Scrimali
Keyword(s):  
Equilibrium Problem ◽  
Walrasian Equilibrium ◽  
Memory Term ◽  
With Memory

scholarly journals Research on Pricing Decision of Direct Sales Green Supply Chain Based on Consumers’ Valuation

2021 ◽  
Vol 2021 ◽  
pp. 1-17
Author(s):  
Yong-Gang Ye ◽  
Xiao-Feng Liu
Keyword(s):  
Supply Chain ◽  
Simulation Analysis ◽  
Stackelberg Game ◽  
Game Model ◽  
Direct Sales ◽  
Equilibrium Prices ◽  
Theoretical Support ◽  
Pricing Decision ◽  
Negative Effect ◽  
Product Valuation

Consumer’s valuation of merchandise is an important factor affecting consumer buying behavior. When the consumer’s valuation exceeds the price of product, the consumer generally makes a decision to purchase the product; conversely, when the consumer’s estimate is lower than the price of product, the consumer will usually refuse to buy the product. From the perspective of consumer product valuation, this study assumed that the consumer’s product valuation obeys a uniform distribution, and a novel consumer demand function was proposed. On this basis, we studied enterprises’ pricing decisions in the supply chain of green agricultural products and obtained the equilibrium prices and optimal profits of the enterprises in several different scenarios, including Vertical Nash game model (VNM), firm A Stackelberg game model (FASM), firm B Stackelberg game model (FBSM), and cooperative game model (CM). In addition, the influence of parameters, such as green level, green preference payment coefficient, and green cost on the optimal profit, was discussed based on game theory and numerical simulation analysis. It was found that equilibrium prices always existed in several different scenarios, and when consumer’s green preference payment coefficient was large enough, the optimal profit of firm B was greater than the optimal profit of firm A. Furthermore, in CM, the sum of optimal profit of firm A and optimal profit of firm B is maximum for four scenarios. Finally, in the three competitive scenarios, green level, green preference payment coefficient, and green cost, have a positive or negative effect on the optimal profits of firm A or firm B. The research conclusions of this study provided theoretical support for the decision-making of enterprises and related management departments.

scholarly journals Fairness: Effect on Temporary and Equilibrium Prices in Posted-Offer Markets

2000 ◽  
pp. 61-76 ◽  
Author(s):  
Robert Franciosi ◽  
Praveen Kujal ◽  
Roland Michelitsch ◽  
Vernon L. Smith ◽  
Gang Deng
Keyword(s):  
Equilibrium Prices ◽  
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