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Chapter Fifteen. Competitive Market Mechanisms as Social Choice Procedures

Hammond, Peter J. - In: Handbook of social choice and welfare : volume 2, (pp. 47-151). 2011

A competitive market mechanism is a prominent example of a nonbinary social choice rule, typically defined for a special class of economic environments in which each social state is an economic allocation of private goods, and individuals’ preferences concern only their own personal...

Persistent link: https://www.econbiz.de/10014025193

A Market-Clearing Classroom Experiment

Bohacek, Radim - 2010

This paper describes a classroom experiment demonstrating the price mechanism and the clearing of markets in an endowment economy. Participants receive random endowments of two goods they may trade in order to maximize a given utility function. A market-clearing price is reached when no mutually...

Persistent link: https://www.econbiz.de/10013150418

Stabilizing the Economy : Market Design and General Equilibrium

Goeree, Jacob K. - 2012

Review, 1960). Tatonnement theory predicts that prices are globally unstable for this economy, i.e. unless prices start at … the competitive equilibrium they oscillate without converging. Anderson et al. (Journal of Economic Theory, 2004) report … convergence. We replicate their experiments and confirm that tatonnement theory predicts the direction of price changes remarkably …

Persistent link: https://www.econbiz.de/10013100705

Global invertibility of excess demand functions

Covarrubias, Enrique - 2013

In this paper we provide necessary and sufficient conditions for the excess demand function of a pure exchange economy to be globally invertible so that there is a unique equilibrium. Indeed, we show that an excess demand function is globally invertible if and only if its Jacobian never vanishes...

Persistent link: https://www.econbiz.de/10010205985

Optimal truncation in matching markets

Coles, Peter A.; Shorrer, Ran - 2013

Since no stable matching mechanism can induce truth-telling as a dominant strategy for all participants, there is often room in matching markets for strategic misrepresentation (Roth [25]). In this paper we study a natural form of strategic misrepresentation: reporting a truncation of one's true...

Persistent link: https://www.econbiz.de/10009756282

Closing the Invisible Hand : A Rehabilitation of Tatonnement Dynamics

Keenan, Donald C.; Kim, Taewon - 2023

Arguments are made that, for a typical economy, with many goods and consumers, classical tatonnement dynamics results in a globally stable equilibrium. Since global stability implies uniqueness of equilibrium, these kinds of results complete the positive general equilibrium program classically...

Persistent link: https://www.econbiz.de/10014345013

Stability and Substitutability in Dynamic Matching Markets

Bando, Keisuke; Kawasaki, Ryo - 2022

We analyze a dynamic matching market where matching between agents is decided for each time period. To analyze this situation, we embed the situation into the framework of many-to-many matching with contracts where the contract includes the time period at which the matching occurs. While a...

Persistent link: https://www.econbiz.de/10013323249

Non-standard choice in matching markets

Caspari, Gian; Khanna, Manshu - 2022

We explore the possibility of designing matching mechanisms that can accommodate non-standard choice behavior. We pin down the necessary and sufficient conditions on participants’ choice behavior for the existence of stable and incentive compatible mechanisms. Our results imply that...

Persistent link: https://www.econbiz.de/10013460341

Closing the Invisible Hand : A Rehabilitation of Tatonnement Dynamics

Keenan, Donald C. - 2021

Persistent link: https://www.econbiz.de/10013243267

The role of demand response in mitigating market power : a quantitative analysis using a stochastic market equilibrium model

Devine, Mel T.; Bertsch, Valentin - 2019

Market power is a dominant feature of many modern electricity markets with an oligopolistic structure, resulting in increased consumer cost. This work investigates how consumers, through demand response (DR), can mitigate against market power. Within DR, our analysis particularly focusses on the...

Persistent link: https://www.econbiz.de/10012098215