Stable processes of exchange

Authored by Spiro Maroulis, Stanley Reiter

Date Published: 2008-12-20

DOI: 10.1016/j.jmateco.2008.07.012

Sponsors: No sponsors listed

Platforms: NetLogo

Model Documentation: Other Narrative Mathematical description

Model Code URLs: Model code not found

Abstract

In this paper we address a long standing gap in economic theory-the gap between claims for the dynamic efficiency of trading in markets, and the findings of formal economic theory, which justify those claims only under restrictive assumptions. We use agent-based methods to study the dynamics of exchange with trading agents who are characterized by several different preference relations. We see that outcomes converge with high probability to Pareto optima in the cases studied, including the well-known example due to Scarf. (C) 2008 Elsevier B.V. All rights reserved.

Tags

Agent-based modeling General equilibrium