Linde Institute/SISL Seminar: Leonard Schulman, Caltech

Friday May 13, 2016 12:00 PM

The Invisible Hand of Laplace: the Role of Market Structure in Price Convergence and Oscillation

Speaker: Leonard Schulman, Division of Engineering and Applied Science, Caltech
Location: Baxter 125

Abstract

A fundamental question about a market is under what conditions, and then how rapidly, does price signaling cause price equilibration. Qualitatively, this ought to depend on how well-connected the market is. We address this question quantitatively for a certain class of Arrow-Debreu markets with continuous-time proportional t\^{a}tonnement dynamics. We show that the algebraic connectivity of the market determines the effectiveness of price signaling equilibration. This also lets us study the rate of external noise that a market can tolerate and still maintain near-equilibrium prices.

Joint work with Yuval Rabani

Series Linde Institute/Social and Information Sciences Laboratory Seminar Series (SISL)

Contact: Barbara Estrada at 626-395-4083 bestrada@hss.caltech.edu