On the dynamics of supply-constrained equilibria

Dreze, Jacques
(1999) The Theory of Markets — ISBN: [0 444 85824 5], p. 7-25, published

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  • Dreze, JacquesUCLouvain
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Abstract
The paper defines a simple tatonnement process of adjustments in prices and quantities, where excess demand results in nominal price increases and excess supply results in quantity rationing of supply at unchanged prices. Under reasonable assumptions, the process converges to a supply-constrained equilibrium. The result contributes to our understanding of how supply-constrained equilibria come about.
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Dreze, J. (1999). On the dynamics of supply-constrained equilibria. In P.J.J. Herings, G. van der Laan, A.J.J. Talman (ed.), The Theory of Markets (p. p. 7-25). https://hdl.handle.net/2078.5/249368