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http://dx.doi.org/10.5302/J.ICROS.2010.16.11.1025

Stability Analysis of Competitive Markets by Supervisory Control Theory  

Park, Seong-Jin (Ajou University)
Publication Information
Journal of Institute of Control, Robotics and Systems / v.16, no.11, 2010 , pp. 1025-1028 More about this Journal
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
competitive markets; stability; discrete event systems; supervisory control;
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