From: John Conover <john@email.johncon.com>
Subject: Re: General Equilibrium Model
Date: 19 Dec 1998 19:11:06 GMT
Burkhard C. Schipper writes:
>
> 1. The General Equilibrium Model in version of Koopmans-McKenzie or
> Arrow-Debreu is not false. It is logically consistent. I recommend Debreu,
> G. "Theory of Value". If somebody has another opinion he should fell free to
> proof.
>
Although the GEM is a valuable concept, (it was published in 1954,) in
1957, R. Duncan Luce and Howard Raiffa, "Games and Decisions," John
Wiley & Sons, New York, New York, ISBN 0-486-65943-7, pp. 104:
Do these examples sound the death knell for the equilibrium
concept as the principal ingredient of a theory of non-cooperative
non-zero sum games? In our opinion, the answer must be Yes if one
demands a realistic theory for all possible non-cooperative
non-zero-sum games, but it is No if one is willing to restrict the
set of games which it is asserted that "a solution exists."
They continue with formal arguments.
Note that they conclude that the paradigm of universal equilibrium in
economics is, in general, false, but that in isolated specific
instances, is true. The above quote was from the preceeding section,
(introduction,) to Nash equilibrium.
John
--
John Conover, john@email.johncon.com, http://www.johncon.com/