Book chapter
Market Equilibrium for CES Exchange Economies: Existence, Multiplicity, and Computation
FSTTCS 2005: Foundations of Software Technology and Theoretical Computer Science, pp.505-516
Lecture Notes in Computer Science, Springer Berlin Heidelberg
2005
DOI: 10.1007/11590156_41
Abstract
We consider exchange economies where the traders’ preferences are expressed in terms of the extensively used constant elasticity of substitution (CES) utility functions. We show that for any such economy it is possible to say in polynomial time whether an equilibrium exists.
We then describe a convex formulation of the equilibrium conditions, which leads to polynomial time algorithms for a wide range of the parameter defining the CES utility functions. This range includes instances that do not satisfy weak gross substitutability. As a byproduct of our work, we prove the uniqueness of equilibrium in an interesting setting where such a result was not known.
The range for which we do not obtain polynomial-time algorithms coincides with the range for which the economies admit multiple disconnected equilibria.
Details
- Title: Subtitle
- Market Equilibrium for CES Exchange Economies: Existence, Multiplicity, and Computation
- Creators
- Bruno Codenotti - IIT-CNR, Pisa, ItalyBenton McCune - University of IowaSriram Penumatcha - Arizona State UniversityKasturi Varadarajan - University of Iowa
- Resource Type
- Book chapter
- Publication Details
- FSTTCS 2005: Foundations of Software Technology and Theoretical Computer Science, pp.505-516
- Publisher
- Springer Berlin Heidelberg; Berlin, Heidelberg
- Series
- Lecture Notes in Computer Science
- DOI
- 10.1007/11590156_41
- eISSN
- 1611-3349
- ISSN
- 0302-9743
- Language
- English
- Date published
- 2005
- Academic Unit
- Computer Science
- Record Identifier
- 9984259464502771
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