“wall RAY jin”
*rhymes with “ASIAN”*
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*a walrasian auction – introduced by ‘Léon Walras’ – is a type of ‘simultaneous auction’ where each ‘agent’ calculates its ‘demand’ for the ‘good’ at every possible ‘price’ and submits this to an ‘auctioneer’*
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The price is then set so that the total demand across all agents equals the total amount of the good.
Thus, a Walrasian auction perfectly matches the supply and the demand.
Walras suggested that equilibrium would always be achieved through a process of tâtonnement (French for “trial and error”), a form of hill climbing.
More recently, however, the Sonnenschein–Mantel–Debreu theorem proved that such a process would not necessarily reach a unique and stable equilibrium, even if the market is populated with perfectly rational agents
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*SKETCHES*
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