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Scarf's Method

version (3.83 KB) by Richard Katzwer
Solves for a general equilibrium price vector to clear an n-good demand and supply system.


Updated 23 Dec 2014

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This function computes a price vector that clears all markets in the demand and supply system specified by the user. The algorithm solves for approximations to equilibrium prices using a modification of Herbert Scarf's simplex algorithm proposed by James MacKinnon and Harold Kuhn. The function returns a 1xN price vector that sums to unity.
* Harold W. Kuhn and James G. MacKinnon, 1975. The sandwich method
for finding fixed points. Journal of Optimization Theory and
Applications, 17, 189-204.
* Herbert E. Scarf, 1977. The computation of equilibrium prices:
An exposition. Handbook of Mathematical Economics, K. J. Arrow &
M.D. Intriligator (ed.), Handbook of Mathematical Economics,
edition 4, 2(21), 1007-1061.
* Andreu Mas-Colell, Michael D. Whinston and Jerry R. Green, 1990.
Part IV: General Equilibrium. Microeconomic Theory. Oxford
University Press, 511-786.

Comments and Ratings (3)


Fixed bug with initial price vector guess.

Cleaned up optional parameter passing.

Updated documentation, variable output arguments.

Updated method documentation, variable output arguments.

MATLAB Release Compatibility
Created with R2013a
Compatible with any release
Platform Compatibility
Windows macOS Linux