Discrete Walrasian Exchange Process

Jean-Marc Bonnisseau (1, 2) , Orntangar Nguenamadji (1, 2)

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

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.

Mots clés: Exchange process; Walrasian equilibrium; local equilibrium; Pareto optimum

Domaines: Optimisation et contrôle [math.OC]; Economies et finances

Jean-Marc Bonnisseau, Orntangar Nguenamadji. Discrete Walrasian Exchange Process. Economic Theory, 2013, 52 (3), pp.1091-1100. ⟨10.1007/s00199-011-0682-y⟩. ⟨halshs-00638196⟩