We study the relation between the stability of a competitive equilibrium (CE) and the price adjustment mechanism used to attain that equilibrium point. Using two specific examples, a three-commodity exchange economy with a unique competitive equilibrium (Scarf’s global instability example) and a two-commodity, two-trader type exchange economy with multiple competitive equilibria, we show that t...

CONTRIBUTORS Irina Leonova, Financial Economist, Division of Market Oversight, Commodity Futures Trading Commission David Taylor, Special Counsel, Division of Market Oversight, Commodity Futures Trading Commission Alan Deaton, Chief of Data Strategy Section, Division of Insurance and Research, Federal Deposit Insurance Corporation Mark Montoya, Senior Business Analyst, Federal Deposit Insurance...

The exchange of private information for services or other benefits is a commonplace practice today in the advent of mobile technology. In the case of mobile services, the exchanged commodity is increasingly often spatial location of the user. To decide whether this transaction is beneficial, the user needs to evaluate the exchange value of this commodity. To assess the value users give to their...

In this paper we prove a new result in graph theory that was motivated by considerations in mathematical economics; more precisely by the problem of price formation in an exchange economy [3]. The aggregate demand/supply in the economy is described by an n × n matrix A = (aij) where aij is the amount of commodity j that is on offer for commodity i. In this context one defines a market-clearing ...