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- W4210339575 abstract "Abstract The idea of equilibrium was imported from the physical sciences into economics already in the nineteenth century [63]. Economists focused on the study of equilibrium because of the idea that this represents a rest point of an underlying dynamic system. A rest point is interpreted as a state of the economic system in which the dynamic forces governing its evolution have come to a static configuration. In economics, this static configuration has been assumed to mean essentially two things: (a) that individual economic behavior is socially consistent, that is, consumption, production, and exchange plans are feasible and can be carried out; and (b) that plans are optimal in the sense of satisfying the objectives of the individual decision makers (consumers/workers, managers, traders, and so on). The study of equilibrium was first developed in the context of markets in which each individual believes to have a negligible impact on aggregate variables such as the commodity or asset prices. These markets are called perfectly competitive, and the theory of equilibrium for perfectly competitive markets – known as Walrasian equilibrium – achieved a formal, general, and rigorous characterization in the 1950s, especially with the work of Arrow and Debreu and McKenzie. The work of Debreu and Smale established local uniqueness of equilibria, paving the way for comparative statics analysis for the Walrasian equilibrium. An alternative view would consider equilibria for an economic system in which each decision‐maker's actions have a nonnegligible impact on everyone else, and on the aggregate as well. The notion of equilibrium for these economies had been developed by Nash." @default.
- W4210339575 created "2022-02-08" @default.
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- W4210339575 date "2004-09-24" @default.
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- W4210339575 title "Equilibrium Theory" @default.
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- W4210339575 doi "https://doi.org/10.1002/9780470012505.tae012" @default.
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