Why prices need algorithms

Tim Roughgarden, Inbal Talgam-Cohen

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Computational complexity has already had plenty to say about the computation of economic equilibria. However, understanding when equilibria are guaranteed to exist is a central theme in economic theory, seemingly unrelated to computation. In this talk we survey our main results presented at EC'15, which show that the existence of equilibria in markets is inextricably connected to the computational complexity of related optimization problems, such as revenue or welfare maximization. We demonstrate how this relationship implies, under suitable complexity assumptions, a host of impossibility results. We also suggest a complexity-theoretic explanation for the lack of useful extensions of the Walrasian equilibrium concept: such extensions seem to require the invention of novel polynomial-time algorithms for welfare maximization.

Original languageEnglish
Title of host publicationSTOC 2017 - Proceedings of the 49th Annual ACM SIGACT Symposium on Theory of Computing
EditorsPierre McKenzie, Valerie King, Hamed Hatami
Pages2
Number of pages1
ISBN (Electronic)9781450345286
DOIs
StatePublished - 19 Jun 2017
Externally publishedYes
Event49th Annual ACM SIGACT Symposium on Theory of Computing, STOC 2017 - Montreal, Canada
Duration: 19 Jun 201723 Jun 2017

Publication series

NameProceedings of the Annual ACM Symposium on Theory of Computing
VolumePart F128415

Conference

Conference49th Annual ACM SIGACT Symposium on Theory of Computing, STOC 2017
Country/TerritoryCanada
CityMontreal
Period19/06/1723/06/17

Keywords

  • Walrasian equilibrium existence
  • Welfare maximization

All Science Journal Classification (ASJC) codes

  • Software

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