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Diagonal dominance and global stability

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  • Keenan, Donald C.
  • Kim, Taewon

Abstract

We show that a natural weakening of diagonal dominance resolves the incompatibility of its standard formulation with the tatonnement of competitive market economies in the presence of either zero-degree homogeneity or Walras’ Law. It thus yields global stability of such unnormalized tatonnement, in addition to normalized tatonnement, just as do the WARP and gross-substitutes conditions of economic theory.

Suggested Citation

  • Keenan, Donald C. & Kim, Taewon, 2013. "Diagonal dominance and global stability," Mathematical Social Sciences, Elsevier, vol. 65(3), pages 217-221.
    • Handle: RePEc:eee:matsoc:v:65:y:2013:i:3:p:217-221
    DOI: 10.1016/j.mathsocsci.2012.11.006
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    References listed on IDEAS

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    1. Dohtani, Akitaka, 1998. "The system stability of dynamic processes," Journal of Mathematical Economics, Elsevier, vol. 29(2), pages 161-182, March.
    2. Keenan, Donald C., 2001. "Aggregate Substitution Effects Implying Global Stability," Journal of Economic Theory, Elsevier, vol. 101(1), pages 317-329, November.
    3. Dierker, Egbert, 1972. "Two Remarks on the Number of Equilibria of an Economy," Econometrica, Econometric Society, vol. 40(5), pages 951-953, September.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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    Cited by:

    1. Jean-Sébastien Lenfant, 2018. "Substitutability and the Quest for Stability," Working Papers hal-01764115, HAL.

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