A computational analysis of core convergence in a multiple equilibria economy

Alok Kumar, Martin Shubik

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We examine the structure of the core of a trading economy with three competitive equilibria as the number of traders (N) is varied. The core first splits into two pieces at N = 5 and then splits a second time into three pieces at N = 12. Both of these splits occur not at a point but as a contiguous gap. We find that the speed of convergence of the core toward the three competitive equilibria is not uniform but when N is large, the convergence rate is approximately of the order 1/N.

Original languageEnglish (US)
Pages (from-to)253-266
Number of pages14
JournalGames and Economic Behavior
Volume42
Issue number2
DOIs
StatePublished - Feb 2003
Externally publishedYes

Keywords

  • Core
  • Multiple competitive equilibria
  • Sensitivity analysis
  • Speed of convergence

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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