The Edgeworth Barter Process
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Non-tatonnement models are constructed in order to take advantage of an obvious Liapunov function — the sum of the utilities of the bartering agents. The presence of this function allows a theory to be developed in which barterers actually trade, thereby changing their endowment of commodities over time. Under additional restrictions, the set of Pareto optima is shown to exhibit certain stability properties.
KeywordsUtility Function Price Mechanism Price Vector Price Rule Free Disposal
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