SFB 303 Discussion Paper No. A - 43
Author: Berninghaus, Siegfried
Title: Price Adjustment Processes with Adaptively Price Setting Firms
Abstract: The paper represents an extension of the theory of price adjustment
processes without an auctioneer where the consumers are incompletely
informed about market prices and firms are incompletely informed
about there own firm specific demand functions. Firms are supposed
to apply a general stochastic price adjustment rule and consumers are
supposed to apply a general price search rule. It can be demonstrated
under these conditions that the resulting stochastic price adjustment
process is a special case of a so called "Generalized Random System
with Complete Connections" whose convergence results are utilized
for our economic adjustment process.
Keywords:
JEL-Classification-Number:
Creation-Date: March 1986
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