Abstract
Analyzing simple and natural price-adjustment processes that converge to a market equilibrium is a fundamental question in economics. Such an analysis may have implications in economic theory, computational economics, and distributed systems. T^atonnement, proposed by Walras in 1874, is a process by which prices go up in response to excess demand, and down in response to excess supply. This paper analyzes the convergence of a time-discrete t^atonnement process, a problem that recently attracted considerable attention of computer scientists. We prove that the simple t^atonnement process that we consider converges (efficiently) to equilibrium prices and allocation in markets with nested CES-Leontief utilities, generalizing some of the previous convergence proofs for more restricted types of utility functions.
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