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Published in:
2011 | OriginalPaper | Chapter
Buy-Sell Auction Mechanisms in Market Equilibrium
Author : Sanjiv Kapoor
Published in: Internet and Network Economics
Publisher: Springer Berlin Heidelberg
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In this paper we consider the problem of computing market equilibrium when utilties are homothetic concave functions. We use the Fisher market model. The problem of finding a tâtonnement process for equilibrium in this case has been the subject of recent papers and determining an approximation is of considerable interest. Our buy-sell algorithm starts with an arbitrary price vector and converges to an
ε
-equilibrium price vector in time proportional to
O
(1/
ε
2
). This process attempts to closely mimic the convergence process of real-life markets.