There are four dimensions along which closed and open team sports leagues can be compared: organizational (section 2), in a Walrasian model
(section 3), using a Nash-equilibrium conjecture (section 4), and through empirical testing (section 5).
While both equilibrium conditions are in the core, Allias' equilibrium arises from many paths leaving an initial state, while only one equilibrium arises in the Walrasian model
Early he was much taken with the Walrasian model
of market equilibrium.
Strictly, the Walrasian model
economy has no levels, only individual actors who potentially can contract with any other individual at very low cost.
(2) We should note that Andolfatto (1996) and Merz (1995) were the first to integrate the matching approach to the labor market into an otherwise standard Walrasian model
and to evaluate this model quantitatively.
Where the perverse curves are due to an externality, the Marshallian model and not the Walrasian model
define the conditions under which unstable equilibria exist.
In my estimation both the theoretical and the historical evidence clearly favour the Walrasian model
if we desire to live in a free society and economy.
What has imperfect competition added to the macroeconomic interest of the Walrasian model
? First, it generates a sub-optimally low level of output and employment, which is an apparently pervasive feature of real economies.
Parameters are chosen so that the two classic models of price dynamics, the Walrasian model
and the Marshallian model, give opposite predictions.
It is the Walrasian model
in its more complete form.