DagSemProc.10171.3.pdf
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Proportional Response as Iterated Cobb-Douglas
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Dagstuhl Seminar Proceedings, Volume 10171
Series: Dagstuhl Seminar Proceedings (DagSemProc) - License:
Creative Commons Attribution 4.0 International license
- Publication Date: 2010-07-15
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Michael J. Todd. Proportional Response as Iterated Cobb-Douglas. In Equilibrium Computation. Dagstuhl Seminar Proceedings, Volume 10171, pp. 1-6, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2010)
https://doi.org/10.4230/DagSemProc.10171.3
Abstract
We show that the proportional response algorithm for computing an economic equilibrium in a Fisher market model can be interpreted as iteratively approximating the economy by one with Cobb-Douglas utilities, for which a closed-form equilibrium can be obtained. We also extend the method to allow elasticities of substitution at most one.
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Keywords
- Computing equilibria
- Fisher market
- proportional response algorithm
- Cobb-Douglas utilities
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