In addition to this central property, it is also required that every agent makes optimal choices based on correct expectations of these constraints. Important applications of the concept of an (economic) equilibrium are the formation of prices on markets (the competitve market equilibrium), and the strategic equilibria used in game theory.
See also: competitive market equilibrium, strategic equilibrium
Literature: Reiter (1987), Varian (1987)
Entry by: Joachim Winter
June 17, 1999
Direct questions and comments to: Glossary master