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The Invisible Hand of Laplace: the Role of Market Structure in Price Convergence and Oscillation

Friday, May 13, 2016
12:00 PM - 1:00 PM
Location: Baxter 125
Leonard Schulman, Professor of Computer Science, Division of Engineering and Applied Science, Caltech


A fundamental question about a market is under what conditions, and then how rapidly, does price signaling cause price equilibration. Qualitatively, this ought to depend on how well-connected the market is. We address this question quantitatively for a certain class of Arrow-Debreu markets with continuous-time proportional t\^{a}tonnement dynamics. We show that the algebraic connectivity of the market determines the effectiveness of price signaling equilibration. This also lets us study the rate of external noise that a market can tolerate and still maintain near-equilibrium prices.

Joint work with Yuval Rabani

Series: Linde Institute/Social and Information Sciences Laboratory Seminar Series (SISL)
For more information, please phone 626-395-4083 or email

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