DOI QR코드

DOI QR Code

Stability Analysis of Competitive Markets by Supervisory Control Theory

관리제어이론을 이용한 경쟁시장의 안정성 해석

  • 박성진 (아주대학교 전자공학부)
  • Received : 2010.07.21
  • Accepted : 2010.09.02
  • Published : 2010.11.01

Abstract

This paper presents a new approach to analyze the stability of dynamic competitive markets within the framework of supervisory control of discrete event systems. A competitive market is representative of free market economy where it is well known that an invisible hand (also referred to as Walrasian auctioneer) always achieves an equilibrium of demand and supply. Upon the framework of supervisory control theory, this paper shows that Walrasian auctioneer is a stabilizing supervisor for a convergent competitive market, however a non-convergent competitive market (e.g. a free market under economic bubble and depression) controlled by Walrasian auctioneer may not be stable.

Keywords

References

  1. K. J. Arrow, “Toward a theory of price adjustment,” The Allocation of Economic Resources (M. Abramovitz et al.), Standford: University of California Press, 1959.
  2. G. Cassandras and S. Lafortune, Introduction to Discrete Event Systems, 2nd Ed., Springer, 2008.
  3. K.-H. Cho and J.-T. Lim, “Stability and robustness of discrete event dynamic systems,” International Journal of Systems Science, vol. 28, no. 7, pp. 691-703, July 1997. https://doi.org/10.1080/00207729708929429
  4. S. Kawasaki, J. McMillan, and K. Zimmermann, “Disequilibrium dynamics: an empirical study,” American Economic Review, vol. 72, no. 5, pp. 992-1004, Dec. 1982.
  5. N. G. Mankiw, Principles of Economics, 4th Ed., Thomson South-Western, 2007.
  6. C. M. Ozveren, A. S. Willsky, and P. J. Antsaklis, “Stability and stabilizability of discrete event dynamic systems,” J. of the Association for Computing Machinery, vol. 38, no. 3, pp. 730-752, July 1991. https://doi.org/10.1145/116825.116855
  7. J. J. Rotemberg, “Monopolistic price adjustment and aggregate output,” Review of Economic Studies, vol. 49, no. 4, pp. 517-531, Oct. 1982. https://doi.org/10.2307/2297284
  8. Wikipedia, “Economic bubble,” http://en.wikipedia.org/wiki/Economic_bubble, 2010.