Why prices need algorithms
Abstract
Understanding when equilibria are guaranteed to exist is a central theme in economic theory, seemingly unrelated to computation. In this note we survey our main result from [Roughgarden and Talgam-Cohen 2015], which shows that the existence of pricing equilibria is inextricably connected to the computational complexity of related optimization problems: demand oracles, revenue-maximization and 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.
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Published In
December 2015
42 pages
Copyright © 2016 Authors.
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Association for Computing Machinery
New York, NY, United States
Publication History
Published: 16 March 2016
Published in SIGECOM Volume 14, Issue 2
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