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A Walrasian auction, introduced by Léon Walras, is a type of simultaneous auction where each agent calculates its demand for the good at every possible price and submits this to an auctioneer. The price is then set so that the total demand across all agents equals the total amount of the good.
Envy-free pricing - a relaxation of Walrasian equilibrium in which some items may remain unallocated. Fisher market - a simplified market model, with a single seller and many buyers, in which a CE can be computed efficiently. Allocative efficiency; Economic equilibrium; General equilibrium theory; Walrasian auction
The Walrasian auction is a type of simultaneous auction where each agent calculates its demand for the good at every possible price and submits this to an auctioneer. The price is then set so that the total demand across all agents equals the total amount of the good. Thus, a Walrasian auction perfectly matches the supply and the demand.
Walras's law is a consequence of finite budgets. If a consumer spends more on good A then they must spend and therefore demand less of good B, reducing B's price. The sum of the values of excess demands across all markets must equal zero, whether or not the economy is in a general equilibrium.
Auction theory is a branch of applied economics that deals with how bidders act in auctions and researches how the features of auctions incentivise predictable outcomes. Auction theory is a tool used to inform the design of real-world auctions. Sellers use auction theory to raise higher revenues while allowing buyers to procure at a lower cost.
Despite its prevalence, the neoclassical synthesis had its Keynesian critics. A strain of disequilibrium or "non-Walrasian" theory developed [70] that criticized the synthesis for apparent contradictions in allowing disequilibrium phenomena, especially involuntary unemployment, to be modeled in equilibrium models. [71]
Theorem — Let be a positive integer. If : {: =,, >} is a set-valued function with closed graph that satisfies Walras's law, then there exists an economy with households indexed by , with no producers ("pure exchange economy"), and household endowments {} such that each household satisfies all assumptions in the "Assumptions" section except the "strict convexity" assumption, and is the excess ...
The Walrasian equilibria of an exchange economy in a general equilibrium model, will lie in the core of the cooperation game between the agents. Graphically, and in a two-agent economy (see Edgeworth Box), the core is the set of points on the contract curve (the set of Pareto optimal allocations) lying between each of the agents' indifference ...