Equilibrium (economic theory)

In economic theory , the concept of equilibrium is used in different meanings (which can sometimes lead to misunderstandings).

The most important meanings that can be distinguished are:

Individual balance in the sense of an optimum - especially the household balance .
Market equilibrium : This is understood to mean equality of supply and demand. In a partial market model only supply and demand for a single good is considered, while a general equilibrium model (such as the Arrow-Debreu model ) examines the existence and properties of a simultaneous market equilibrium for all goods.
Nash equilibrium (named after John Nash ): The most important solution concept in game theory , which describes a combination of strategies in which none of the parties involved has an incentive to deviate unilaterally. In other words, a Nash equilibrium consists of mutually best answers. Numerous refinements of the Nash equilibrium are used in game theory, e.g. E.g .: strict Nash equilibrium , subgame perfect equilibrium, equilibrium in dominant strategies. But generalizations have also been suggested, particularly the balance in correlated strategies .
Long-term equilibrium: In dynamic models - such as the neoclassical growth theory - equilibrium is often understood as a steady state in which central variables - typically capital intensity in growth theory - do not change (any more).

The fact that equilibria have no tendency to change does not mean that equilibrium is an ideal or desirable state.

Individual evidence

↑ Chiang, AC, and Kevin Wainwright. "Fundamental methods of mathematical economics." McGraw-Hill, New York (2005). ISBN 978-0071238236 . Chapter 3. P. 31.

Arnis Vilks, neoclassical, balance and reality. An investigation into the foundations of economic theory . Physica, Heidelberg 1991, ISBN 3-7908-0569-6 .
Chiang, AC, and Kevin Wainwright. "Fundamental methods of mathematical economics." McGraw-Hill, New York (2005). ISBN 978-0071238236 . Chapter 3.