Nash and Walras Equilibrium
19 Pages Posted: 16 Jul 2001
Date Written: June 2001
The existence of Nash and Walras equilibrium is proved via Brouwer's Fixed Point Theorem, without recourse to Kakutani's Fixed Point Theorem for correspondences. The domain of the Walras fixed point map is confined to the price simplex, even when there is production and weakly quasi-convex preferences. The key idea is to replace optimization with "satisficing improvement," i.e., to replace the Maximum Principle with the "Satisficing Principle."
Keywords: Equilibrium, Nash, Walras, Brouwer, Kakutani
JEL Classification: C6, C62
Suggested Citation: Suggested Citation