A Note on Stochastic Rationing Mechanisms / Takatoshi Ito.

By:

Ito, Takatoshi

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w0313.Publication details: Cambridge, Mass. National Bureau of Economic Research 1979.Description: 1 online resource: illustrations (black and white)Online resources:

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Abstract: There are a couple of well-known unsatisfactory properties in the notion of effective demand defined by Benassy and one by Dreze. This is why recent authors in disequilibrium analysis study the stochastic rationing mechanism. Douglas Gale proved the existence of the equilibrium with stochastic rationing mechanism. However, Gale 's rationing mechanism requires an economic agent to know all the individual effective demands from the other agents. This creates the informational problem. Green examined a rationing scheme which depends only on the individual effective demand and the aggregate signals. However, he did not consider conditions on rationing mechanisms to show the existence of temporary equilibrium. The purpose of this paper is to show a couple of sufficient conditions for the existence of temporary equilibrium preserving all properties Green considered on rationing mechanisms. We also discuss the possibility of balancing demand and supply in realization instead of in the mean.

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1979.

There are a couple of well-known unsatisfactory properties in the notion of effective demand defined by Benassy and one by Dreze. This is why recent authors in disequilibrium analysis study the stochastic rationing mechanism. Douglas Gale proved the existence of the equilibrium with stochastic rationing mechanism. However, Gale 's rationing mechanism requires an economic agent to know all the individual effective demands from the other agents. This creates the informational problem. Green examined a rationing scheme which depends only on the individual effective demand and the aggregate signals. However, he did not consider conditions on rationing mechanisms to show the existence of temporary equilibrium. The purpose of this paper is to show a couple of sufficient conditions for the existence of temporary equilibrium preserving all properties Green considered on rationing mechanisms. We also discuss the possibility of balancing demand and supply in realization instead of in the mean.