Discrete Walrasian Exchange Process

Journal article: In an exchange economy, we define a discrete exchange process, which is Walrasian since the trades are determined by the equilibrium allocation of the local equilibrium. We prove that this process attains a Pareto optimal allocation after a finite number of steps and the local equilibrium price then supports the Pareto optimal allocation. Furthermore, along the process, the allocation remains feasible and the utility of each consumer is non-decreasing.

Author(s)

Jean-Marc Bonnisseau, Orntangar Nguenamadji

Journal
  • Economic Theory
Date of publication
  • 2013
Keywords JEL
C61 D51 D61
Pages
  • 1091-1100
Version
  • 1
Volume
  • 52