SFB 303 Discussion Paper No. A - 208
Author: Kamecke, Ulrich
Title: Computing Equilibrium in a Matching Market with a Walrasian Mechanism
Abstract: Consider a market for indivisible goods where every agent either buys or sells not more than one unit of
the commodity. The paper generalizes the concept of excess demand such that the usual price adjustment process
can be reformulated even though the traded goods are not necessarily identical. An algorithm is constructed
which increases the sellers´ payoffs wherever the excess demand is positive until it arrives at the buyer-optimal
equilibrium after finitely many steps. This "Walrasian mechanism" generalizes the simplex algorithm applied to
the dual of the standard linear assignment problem. And it can also be interpreted as a short cut for an
approximation scheme that was presented by Roth, Crawford and Knoer.
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Creation-Date: November 1988
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