Encyclopedia of Optimization

2001 Edition
| Editors: Christodoulos A. Floudas, Panos M. Pardalos

Walrasian Price Equilibrium

WPE
  • Anna Nagurney
Reference work entry
DOI: https://doi.org/10.1007/0-306-48332-7_545
How to cite

The Walrasian price or pure exchange equilibrium problem is a general as opposed to partial equilibrium problem in that all commodities in the economy are treated. In addition, it is an example of perfect competition in that it is assumed that producers take the prices as given and can not individually influence the prices. This problem has been extensively studied in the economics literature dating to L. Walras [20]; see also [19], [4], [2], [10].

In the pure exchange model the consumer side of the economy is modeled by the excess demand functions and it is assumed that production is absent and consumers exchange commodities that they initially own. Production can be introduced into this basic framework in a variety of ways by including, for example, an activity analysis model to describe the productive techniques in the economy (cf. [15], [14). The excess demand functions are aggregated demand functions over the individual consumers in the economy. They represent the difference...

91B50 
pure exchange pure trade general economic equilibrium perfect competition Walras law aggregate excess demand function variational inequality formulation projection method relaxation method 
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© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Anna Nagurney
    • 1
  1. 1.Univ. MassachusettsAmherstUSA