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A Double‐Track Adjustment Process for Discrete Markets With Substitutes and Complements
Author(s) -
Sun Ning,
Yang Zaifu
Publication year - 2009
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta6514
Subject(s) - set (abstract data type) , process (computing) , track (disk drive) , mathematical economics , computer science , economics , microeconomics , general equilibrium theory , walrasian auction , common value auction , vickrey auction , operating system , auction theory , programming language
We propose a new Walrasian tâtonnement process called a double‐track procedure for efficiently allocating multiple heterogeneous indivisible items in two distinct sets to many buyers who view items in the same set as substitutes but items across the two sets as complements. In each round of the process, a Walrasian auctioneer first announces the current prices for all items, buyers respond by reporting their demands at these prices, and then the auctioneer adjusts simultaneously the prices of items in one set upward but those of items in the other set downward. It is shown that this procedure converges globally to a Walrasian equilibrium in finitely many rounds.