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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 ...
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.
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 ...
The implicit assumption is that the study of a one agent economy will provide useful insights into the functioning of a real world economy with many economic agents. This article pertains to the study of consumer behaviour, producer behaviour and equilibrium as a part of microeconomics. In other fields of economics, the Robinson Crusoe economy ...
This means that the equilibrium price depends positively on the demand intercept if g – b > 0, but depends negatively on it if g – b < 0. Which of these possibilities is relevant? In fact, starting from an initial static equilibrium and then changing a, the new equilibrium is relevant only if the market actually goes to that new equilibrium ...
Market equilibrium computation (also called competitive equilibrium computation or clearing-prices computation) is a computational problem in the intersection of economics and computer science. The input to this problem is a market , consisting of a set of resources and a set of agents .
A competitive equilibrium is a price function P and an allocation matrix X such that: The bundle allocated by X to each agent is in that agent's demand-set for the price-vector P; Every good which has a positive price is fully allocated (i.e. every unallocated item has price 0).
From consumer equilibrium for an individual, the book aggregates to market equilibrium across all individuals, producers, and goods. In so doing, Hicks introduced Walrasian general equilibrium theory to an English-speaking audience. This was the first publication to attempt a rigorous statement of stability conditions for