Decentralized Pricing and the equivalence between Nash and Walrasian equilibrium

Antoine Mandel (1, 2) , Herbert Gintis (3)

1 PSE - Paris School of Economics
2 CES - Centre d'économie de la Sorbonne
3 Santa Fe Institute

We introduce, in the standard exchange economy model, market games in which agents use private prices as strategies. We give conditions on the game form that ensure that the only strict Nash equilibria of the game are the competitive equilibria of the underlying economy. This equivalence result has two main corollaries. First, it adds to the evidence that competitive equilibria can be strategically stable even in small economies. Second, it implies that competitive equilibria have good local stability properties under a large class of evolutionary learning dynamics.

Mots clés: Computational economics; Evolutionary game theory; Market games; Stability; General equilibrium

Domaines: Economies et finances

Antoine Mandel, Herbert Gintis. Decentralized Pricing and the equivalence between Nash and Walrasian equilibrium. Journal of Mathematical Economics, 2016, 63, pp.84-92. ⟨10.1016/j.jmateco.2015.12.008⟩. ⟨halshs-01296646⟩