Biblio

Walrasian equilibrium prices have a remarkable property: they allow each buyer to purchase a bundle of goods that she finds the most desirable, while guaranteeing that the induced allocation over all buyers will globally maximize social welfare. However, this clean story has two caveats. * First, the prices may induce indifferences. In fact, the minimal equilibrium prices necessarily induce indifferences. Accordingly, buyers may need to coordinate with one another to arrive at a socially optimal outcome—the prices alone are not sufficient to coordinate the market. * Second, although natural procedures converge to Walrasian equilibrium prices on a fixed population, in practice buyers typically observe prices without participating in a price computation process. These prices cannot be perfect Walrasian equilibrium prices, but instead somehow reflect distributional information about the market. To better understand the performance of Walrasian prices when facing these two problems, we give two results. First, we propose a mild genericity condition on valuations under which the minimal Walrasian equilibrium prices induce allocations which result in low over-demand, no matter how the buyers break ties. In fact, under genericity the over-demand of any good can be bounded by 1, which is the best possible at the minimal prices. We demonstrate our results for unit demand valuations and give an extension to matroid based valuations (MBV), conjectured to be equivalent to gross substitute valuations (GS). Second, we use techniques from learning theory to argue that the over-demand and welfare induced by a price vector converge to their expectations uniformly over the class of all price vectors, with respective sample complexity linear and quadratic in the number of goods in the market. These results make no assumption on the form of the valuation functions. These two results imply that under a mild genericity condition, the exact Walrasian equilibrium prices computed in a market are guaranteed to induce both low over-demand and high welfare when used in a new market where agents are sampled independently from the same distribution, whenever the number of agents is larger than the number of commodities in the market.