Name
Abstract | ||
|---|---|---|
We study out-of-equilibrium price dynamics in Fisher markets. We develop a general framework in which sellers have (a) a set of atomic price update rules (APU), which are simple responses to a price vector; (b) a belief-formation procedure that simulates actions of other sellers (themselves using the APU) to some finite horizon in the future. Sellers use an APU to respond to a price vector they generate with the belief formation procedure. The framework allows sellers to have inconsistent and time-varying beliefs about each other. Under mild and natural assumptions on the APU, we show that despite the inconsistent and time-varying nature of beliefs, the market converges to a unique equilibrium at a linear rate (distance to equilibrium decreases exponentially in time). If the APU are driven by weak gross substitutes demands, the equilibrium point is the same as predicted by those demands. |
Year | DOI | Venue |
|---|---|---|
2022 | 10.1016/j.geb.2020.11.005 | Games and Economic Behavior |
Keywords | DocType | Volume |
Fisher markets,Disequilibrium,Market dynamics,Bounded rationality,Best response,Level k model | Journal | 134 |
ISSN | Citations | PageRank |
0899-8256 | 0 | 0.34 |
References | Authors | |
0 | 3 | |
Name | Order | Citations | PageRank |
|---|---|---|---|
| Krishnamurthy Dvijotham | 1 | 187 | 26.90 |
| Yuval Rabani | 2 | 2265 | 274.98 |
| Leonard J. Schulman | 3 | 1328 | 136.88 |