Walras Competition Model, an Example of Global Optimization

Article type: Research Article

Authors: Mockus, Jonas

Affiliations: Kaunas Technological University, Vilnius Technical University, Institute of Mathematics and Informatics, Akademijos 4, 08663 Vilnius, Lithuania, e‐mail: [email protected]

Abstract: Walras theory is well known and widely used in models of market economy. Various iterative methods are developed to search for the equilibrium conditions. In this paper a new approach is proposed and implemented where the search for Walras equilibrium is defined as a stochastic global optimization problem. This way random nature of customer arrivals is represented and the convergence to equilibrium is provided if equilibrium exists. This paper describes a part of a Web‐based integrated system for scientific cooperation and distance graduate studies of theories of optimization, games and markets which aim is to provide researchers and graduate students with hands‐on experience on effective use of software. The objectives are to provide a tool for scientific collaboration and to stimulate creative abilities of graduate students to work as independent researchers. The web‐site http://soften.ktu.lt/˜mockus includes a family of economic and finnacial models regarding them all as examples of the the general optimization theory.

Keywords: Walras model, Nash equilibrium, stochastic global optimization, internet environment

Journal: Informatica, vol. 15, no. 4, pp. 525-550, 2004