Figure 1: Specification of a Market Algorithm1.0 Introduction
This article is heavily based on Bidard (2004).
An approach to the analysis of the choice of technique, in keeping with construction of the outer envelope of wage curves,
is to consider replacing processes, more or less, one at a time.
This post presents this approach as following an algorithm.
Assume that a set of techniques exist where all techniques are at least viable, indecomposable, and produce the same set of commodities. From the set of techniques, one can form a set of processes. In each process, workers produce a single commodity at the end of the year from certain inputs. The inputs, by assumption, are totally consumed in the course of the year. I also assume that the numeraire is specified.
Consider theRead More »