Reaching market equilibrium merely by bilateral barters

Motivated by emission and resource markets, this paper considers repeated, bilateral barters between owners of commodity bundles, contingent claims, or property rights. Focus is on feasible, voluntary exchanges, driven only by differences in substitution rates. No coordination is ever needed. The modelling complies with adaptive learning, behavioral economics, and decentralized decision-making. Presuming transferable utility, the paper provides sufficient conditions for convergence to market equilibrium. It is expedient that some parties have differentiable objectives or make strictly feasible choices.