Decentralized pricing and the equivalence between Nash and Walrasian equilibrium

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Antoine Mandel, Herbert Gintis
Journal of Mathematical Economics
Issue number: 
Volume 63, March 2016
Journal pages: 
We introduce, in the standard exchange economy model, market games in which agents use private prices as strategies. We give conditions on the game form that ensure that the only strict Nash equilibria of the game are the competitive equilibria of the underlying economy. This equivalence result has two main corollaries. First, it adds to the evidence that competitive equilibria can be strategically stable even in small economies. Second, it implies that competitive equilibria have good local stability properties under a large class of evolutionary learning dynamics.
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