Concept Of General Equilibrium Research Articles

Joint beliefs in conflictual coordination games

The traditional solution concept for noncooperative game theory is the Nash equilibrium, which contains an implicit assumption that players’ probability distributions satisfy t probabilistic independence. However, in games with more than two players, relaxing this assumption results in a more general equilibrium concept based on joint beliefs (Vanderschraaf, 1995). This article explores the implications of this joint-beliefs equilibrium concept for two kinds of conflictual coordination games: crisis bargaining and public goods provision. We find that, using updating consistent with Bayes’ rule, players’ beliefs converge to equilibria in joint beliefs which do not satisfy probabilistic independence. In addition, joint beliefs greatly expand the set of mixed equilibria. On the face of it, allowing for joint beliefs might be expected to increase the prospects for coordination. However, we show that if players use joint beliefs, which may be more likely as the number of players increases, then the prospects for coordination in these games declines vis-a-vis independent beliefs.

An extension of the dynamical foundation for the statistical equilibrium concept

This paper reviews a recently introduced generalization of dynamical stationarity involving the appearance of stable convolution semigroups in the ultralong time limit. Dynamical stationarity is the basis of the equilibrium concept in statistical mechanics, and the ultralong time limit is a limit in which a discretized time flow is iterated infinitely often while the discretization time step becomes infinite. The new limit is necessary when investigating induced automorphisms for subsets of measure zero. It is found that the induced dynamics of subsets of zero measure is given generically by stable convolution semigroups and not by the conventional translation group. This could provide insight into the macroscopic irreversibility paradox. The induced semigroups are generated by fractional time derivatives of orders less than unity, not by a first-order time derivative as the conventional group. Invariance under the induced semiflows therefore leads to a new form of stationarity, called fractional stationarity. Fractional stationarity provides the dynamical foundation for a generalized equilibrium concept.

FOUNDATIONS OF FRACTIONAL DYNAMICS

Time flow in dynamical systems is reconsidered in the ultralong time limit. The ultralong time limit is a limit in which a discretized time flow is iterated infinitely often and the discretization time step is infinite. The new limit is used to study induced flows in ergodic theory, in particular for subsets of measure zero. Induced flows on subsets of measure zero require an infinite renormalization of time in the ultralong time limit. It is found that induced flows are given generically by stable convolution semigroups and not by the conventional translation groups. This could give new insight into the origin of macroscopic irreversibility. Moreover, the induced semigroups are generated by fractional time derivatives of orders less than unity, and not by a first order time derivative. Invariance under the induced semiflows therefore leads to a new form of stationarity, called fractional stationarity. Fractionally stationary states are dissipative. Fractional stationarity also provides the dynamical foundation for a previously proposed generalized equilibrium concept.

Endogenous correlated equilibria in noncooperative games

Most of the results of modern game theory presuppose that the choices rational agents make in noncooperative games are probabilistically independent. In this paper I argue that there is noa priori reason for rational agents to assume probabilistic independence. I introduce a solution concept for noncooperative games called anendogenous correlated equilibrium, which generalizes the Nash equilibrium concept by dropping probabilistic independence. I contrast the endogenous correlated equilibrium with the correlated equilibrium defined by Aumann (1974, 1987). I conclude that in general the endogenous correlated equilibrium concept is a more appropriate solution concept for noncooperative game theory than the less general Nash equilibrium concept. I close by discussing the relationship between endogenous correlated equilibrium and the game solution concept calledrationalizability introduced by Bernheim (1984) and Pearce (1984).

Measures of Waste Due to Quotas

This paper addresses the issue of measuring welfare losses due to imposition of a production quota. The topic of welfare measurement is important in agriculture because production quotas are a ubiquitous component of agricultural policy. While it is probably true that in the arena of policy decisions the somewhat subtle distinctions of alternative measures of loss with usually be swamped by errors in measuring them, it is important nonetheless that economists, at least, be clear about which concepts are being measured and why. Our objective is to elaborate briefly two alternative general equilibrium concepts (Diewert) of the welfare loss due to the imposition of a production quota, and to illustrate their use by considering the costs of the U.S. tobacco program. In addition to the two concepts elaborated here, other alternatives might be considered, and there is good reason to evaluate them for an open economy, rather than the closed economy model used here. Space considerations dictate that these alternatives be considered in another paper.

A Set of Axioms for Neoclassical Economics and the Methodological Status of the Equilibrium Concept

It is widely agreed that the concept of general equilibrium and, in particular, general equilibrium existence proofs play a central role within the neoclassical approach to economic theory. There is much less agreement, however, on the concepts of general equilibrium and of neoclassical economic theory themselves.

Systemic Disequilibrium, Foreign Policy Role, and the Power Cycle

Confronting widespread ambiguities of theory and research design, this article establishes conditions underlying international political stability for state and system. In turn, it (1) dissects the cycle of relative power and role to elucidate the concept of general equilibrium, depicting graphically the trauma of role adjustment that accompanies critical changes in relative power; (2) compares the empirical results for transitions and critical points using the same set of data; (3) shows mathematically that inversions in the trend of slope can approximate critical intervals; and (4) demonstrates via diagrams of each state's critical change why the disequilibrated system 1885-1914 succumbed to massive world war. Empirical research on systems transformation and major war must incorporate both strategic power balancing and power-role equilibration for states in the central system in a broader concept like general equilibrium.

From Walras’s General Equilibrium to Hicks’s Temporary Equilibrium

SummaryStarting by and overview of open problems in the Walrasian heritage, the paper reviews tne debates which paved the way to Hicksian temporary equilibrium. In the late twenties and the thirties the open issue of equilibrium and business fluctuations gave rise to new research programmes centered on the need to add the time dimension in equilibrium analysis. The crucial result of the equilibrium and time controversy was that the general equilibrium concept cannot be defined unless it is related to a time horizon and to a process of planning over a time horizon. Ideas of intertemporal and temporary equilibrium in the writings of Hayek and Lindhal are examined in close connection with the debate on information and perfect foresight. The paper evaluates the novelty of Value and Capital with respect to the previous Austrian and Swedish contributions, arguing that the temporally equilibrium approach gained a more precise body of theory, but at the same time it lost its more innovative perspective.

The Objective Demand Curve in General Equilibrium with Price Makers

Objective demand curves in general equilibrium with explicitly modeled price makers have been defined so far in a number of specific cases. This paper gives a general definition of such an objective demand curve. The associated general equilibrium concept is defined, and sufficient existence conditions are given. Copyright 1987 by Royal Economic Society.

General Economic Equilibrium as a Unifying Concept in Energy-Economic Modeling

In the pristine model of general economic equilibrium producers and consumers are assumed to take prices for their inputs and outputs as given. A market equilibrium solution is obtained when the prices of all products lead to equal amounts of supply and demand for each. The mathematical properties of this model provide a rich and powerful unifying foundation for much of modern microeconomic theory. However, in many practical applications it is difficult or impossible to develop the data, and formulate and solve the equations required to implement the model of general economic equilibrium in its most general form. In practice, generality of formulation is often sacrificed for ease of computation and interpretation. These tradeoffs allow the latest breakthroughs in optimization algorithms and computer technology to be applied in the analysis of important societal problems. A potential drawback associated with this otherwise desirable trend is that the analysis could become infatuated with the use of particular algorithms, and lose sight of the restrictive simplifying assumptions they imply. The present paper includes a comparison of the simplifying assumptions required in four of the most popular types of energy-economic models with respect to the model of general economic equilibrium. This comparison helps sharpen our appreciation for the tradeoffs between generalization of formulation and ease of computation and interpretation that are available. The concept of general economic equilibrium is employed to provide a common framework for four ostensibly different approaches to large-scale modeling: (1) variable-coefficient input-output theory, (2) process network methodology, (3) linear programming and (4) general nonlinear optimization. The similarities and the differences of the four approaches are isolated within this framework. This comparison makes both the absolute and the relative strengths and weaknesses of the models more transparent.

A Review of Problems in the Interpretation of Producers' Surplus

Since their first (extensive) use by him, Marshall's area measures of consumers' and [4, 124] have, it seems, passed through rather similar phases of acceptance and rejection, as weaknesses and strengths, valid and invalid interpretations, have been pointed out.' The crux of the issue revolves around the question of whether these measures (area between the demand curve and the price line for consumers' and between the supply curve and the price line for surplus) are meaningful2 indicators of gain to buyers and to factors of production respectively, and/or of net gains to society as a whole; if they measure either gains to distinguishable groups or to society as a whole, they are useful tools in welfare analysis. That Marshall's area measure of consumers' is a meaningful one, provided that it is carefully interpreted, is presumably now accepted [9, 395]. A similar consensus has not, however, been reached in the case of the producers' surplus measure.3 We argue here (a) that in a formal sense the two measures are almost fully s mmetrical, and (b) that there is little reason to believe that the set of conditions which make the consumers' measure meaningful are better satisfied in the real world than the (almost) symmetrical set which make the measure relevant. Further (and given that it is unlikely that either can have an interesting interpretation except in a general equilibrium concept), it will be seen (c) that the likelihood that the sum of the two can be meaningfully interpreted is greater than that for either separately. Finally (d) while the measures do not in general represent gains to those sets of individuals who buy the good at the equilibrium price or supply factors to it at the equilibrium price, they are meaningful measures of the gains to society as a whole from the consumption and/or production of the good in question.

General Equilibrium and the Effective Rate of Protection

Previous articleNext article No AccessGeneral Equilibrium and the Effective Rate of ProtectionJames E. AndersonJames E. Anderson Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 78, Number 4, Part 1Jul. - Aug., 1970Part 1 Article DOIhttps://doi.org/10.1086/259664 Views: 4Total views on this site Citations: 11Citations are reported from Crossref Copyright 1970 The University of ChicagoPDF download Crossref reports the following articles citing this article:Bao Ho Dinh, Hai Nguyen Phuc, Trinh Bui, Hau Nguyen Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis, Economies 8, no.22 (Jun 2020): 43.https://doi.org/10.3390/economies8020043Bo Chen, Hong Ma, David S. Jacks Revisiting the Effective Rate of Protection in the Late Stages of Chinese Industrialisation, The World Economy 40, no.22 (Jun 2016): 424–438.https://doi.org/10.1111/twec.12408Henning Tarp Jensen, Sherman Robinson, Finn Tarp Measuring Agricultural Policy Bias: General Equilibrium Analysis of Fifteen Developing Countries, American Journal of Agricultural Economics 92, no.44 (Jul 2010): 1136–1148.https://doi.org/10.1093/ajae/aaq043Chris Milner PROTECTION BY TARIFF BARRIERS AND INTERNATIONAL TRANSACTION COSTS, Scottish Journal of Political Economy 52, no.11 (Feb 2005): 105–121.https://doi.org/10.1111/j.0036-9292.2005.00337.xAlessandro Antimiani, Luca Salvatici EU Trade Policies: Benchmarking Protection in a General Equilibrium Framework, SSRN Electronic Journal (Jan 2005).https://doi.org/10.2139/ssrn.903290Chris Milner Protection by Tariff Barriers and International Transport Costs, SSRN Electronic Journal (Jan 2003).https://doi.org/10.2139/ssrn.410810James E. Anderson Effective protection redux, Journal of International Economics 44, no.11 (Feb 1998): 21–44.https://doi.org/10.1016/S0022-1996(97)00006-8Wilhelm Kohler Income distribution and labor market effects of Austrian pre- and post-Tokyo-round tariff protection, European Economic Review 35, no.11 (Jan 1991): 139–154.https://doi.org/10.1016/0014-2921(91)90108-UJaime A. P. Melo Tariffs and resource allocation in partial and in general equilibrium, Weltwirtschaftliches Archiv 116, no.11 (Mar 1980): 114–130.https://doi.org/10.1007/BF02719614Bent Hansen Effective protection, Journal of International Economics 4, no.22 (May 1974): 207–211.https://doi.org/10.1016/0022-1996(74)90063-4James E. Anderson Effective protection in the U.S.: A historical comparison, Journal of International Economics 2, no.11 (Feb 1972): 57–76.https://doi.org/10.1016/0022-1996(72)90045-1