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Individualistic Foundation for General Equilibrium Theory: a Review of some Game Theoretic Approaches

Published online by Cambridge University Press:  17 August 2016

Maarten C. W. Janssen
Maarten C. W. Janssen*
Affiliation:
University of Groningen
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Summary

Cet article soutient que la théorie de l’équilibre général ne peut pas s’interpréter comme un exemple réussi de l’individualisme méthodologique. La raison première en est que la condition d’équilibre du marché ne découle pas logiquement du comportement individuel rationnel des agents. L’article examine de manière critique quelques approches de la théorie des jeux qui tentent de donner un fondement à l’équilibre du marché et montre qu’elles ne réussissent pas à fonder l’équilibre sur les principes de l’individualisme méthodologique. L’article prétend donc qu’il n’est pas (encore) démontré que les interactions d’agents rationnels dans une économie de marché aboutissent nécessairement à une allocation efficiente des biens entre les individus.

This paper argues that general equilibrium theory cannot be regarded as a successful economic example of methodological individualism. The main argument is that the market clearing condition is not a logical consequence of rational individual behaviour. Some game theoretic approches that attempt to provide foundations for the market clearing condition are critically examined. It is shown that none of these approaches provides foundations in line with methodological individualism. Accordingly, it is not (yet) shown that the interaction of rational agents in a market economy necessarily results in an efficient allocation of commodities over individuals.

Keywords

021026036021026036
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 55 , Issue 4 , 1989 , pp. 425 - 446
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1989 

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Footnotes

*

The author thanks L. Hoogduin, T. Kuipers, G. Pikkemaat and participants in the workshop in Louvain-la-Neuve, in particular Ph. Mongin, for their critical remarks. Of course, the usual disclaimer applies. This research is partly financed by the Netherlands Organisation for Scientific Research (N.W.O.).

References

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