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  2. Economic equilibrium - Wikipedia

    en.wikipedia.org/wiki/Economic_equilibrium

    In most simple microeconomic stories of supply and demand a static equilibrium is observed in a market; however, economic equilibrium can be also dynamic. Equilibrium may also be economy-wide or general, as opposed to the partial equilibrium of a single market. Equilibrium can change if there is a change in demand or supply conditions.

  3. The Market for Lemons - Wikipedia

    en.wikipedia.org/wiki/The_Market_for_Lemons

    The expected utility for the buyer will always increase - for a monotonic, positive utility function - as the probability of encountering a peach increases. = (¯) (¯) > Furthermore, the equation for a buyer's expected utility implies that the equilibrium price in an informationally symmetric market is: = (¯) + (¯) However, the used car ...

  4. Stackelberg competition - Wikipedia

    en.wikipedia.org/wiki/Stackelberg_competition

    It is named after the German economist Heinrich Freiherr von Stackelberg who published Marktform und Gleichgewicht [Market Structure and Equilibrium] in 1934, which described the model. In game theory terms, the players of this game are a leader and a follower and they compete on quantity. The Stackelberg leader is sometimes referred to as the ...

  5. Supply and demand - Wikipedia

    en.wikipedia.org/wiki/Supply_and_demand

    Partial equilibrium, as the name suggests, takes into consideration only a part of the market to attain equilibrium. Jain proposes (attributed to George Stigler ): "A partial equilibrium is one which is based on only a restricted range of data, a standard example is price of a single product, the prices of all other products being held fixed ...

  6. Competitive equilibrium - Wikipedia

    en.wikipedia.org/wiki/Competitive_equilibrium

    A competitive equilibrium (CE) consists of two elements: A price function . It takes as argument a vector representing a bundle of commodities, and returns a positive real number that represents its price. Usually the price function is linear - it is represented as a vector of prices, a price for each commodity type.

  7. Bertrand competition - Wikipedia

    en.wikipedia.org/wiki/Bertrand_competition

    This lack of equilibrium arises from the firms competing in a market with substitute goods, where consumers favor the cheaper product due to identical preferences. Additionally, equilibrium is not achieved when firms set different prices; the higher-priced firm earns nothing, prompting it to lower prices to undercut the competitor.

  8. Perfect competition - Wikipedia

    en.wikipedia.org/wiki/Perfect_competition

    The real estate market is an example of a very imperfect market. In such markets, the theory of the second best proves that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would otherwise be optimal.

  9. Walrasian auction - Wikipedia

    en.wikipedia.org/wiki/Walrasian_auction

    Walras suggested that equilibrium would always be achieved through a process of tâtonnement (French for "trial and error"), a form of hill climbing. [1] In the 1970s, however, the Sonnenschein–Mantel–Debreu theorem proved that such a process would not necessarily reach a unique and stable equilibrium, even if the market is populated with ...