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Perturbation theory in a pure-exchange nonequilibrium economy

Vazquez, SE; Severini, S; (2010) Perturbation theory in a pure-exchange nonequilibrium economy. PHYS REV E , 81 (3) , Article 036102. 10.1103/PhysRevE.81.036102.

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Abstract

We develop a formalism to study linearized perturbations around the equilibria of a pure-exchange economy. With the use of mean-field theory techniques, we derive equations for the flow of products in an economy driven by heterogeneous preferences and probabilistic interaction between agents. We are able to show that if the economic agents have static preferences, which are also homogeneous in any of the steady states, the final wealth distribution is independent of the dynamics of the nonequilibrium theory. In particular, it is completely determined in terms of the initial conditions and it is independent of the probability, and the network of interaction between agents. We show that the main effect of the network is to determine the relaxation time via the usual eigenvalue gap as in random walks on graphs.

Type:Article
Title:Perturbation theory in a pure-exchange nonequilibrium economy
DOI:10.1103/PhysRevE.81.036102
Keywords:EQUILIBRIUM
UCL classification:UCL > School of BEAMS > Faculty of Engineering Science > Computer Science

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