Existence and uniqueness of stochastic price equilibria in heterogeneous markets

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper contributes to the literature on existence and uniqueness of stochastic market equilibria in two ways. First it is pointed out that gross substitutability is a fairly general characteristic of the (expected) market demand functions that result when choice behaviour of individual actors is described by means of discrete choice models. This enables one to reach simpler proofs of existence and uniqueness of price equilibria. Second, a necessary and sufficient condition for uniqueness is formulated. This is shown for a model in which, as a further improvement, the unrealistic assumption of balance is dropped. The special case of a balanced market is later on discussed separately and similar results are shown to hold there.

Original languageEnglish
Pages (from-to)43-64
Number of pages22
JournalRegional Science and Urban Economics
Volume20
Issue number1
DOIs
Publication statusPublished - 1 Jan 1990

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market equilibrium
market
general characteristics
demand
price
Equilibrium price
Uniqueness
literature
Discrete choice models
Market demand
Market equilibrium
Choice behavior
Substitutability
Demand function

Cite this

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Existence and uniqueness of stochastic price equilibria in heterogeneous markets. / Rouwendal, Jan.

In: Regional Science and Urban Economics, Vol. 20, No. 1, 01.01.1990, p. 43-64.

Research output: Contribution to JournalArticleAcademicpeer-review

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