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Walrasian Market

What is 'Walrasian Market'

An economic model of a market process in which orders are collected into batches of buys and sells and then analyzed to determine a clearing price that will decide the market price. Also referred to as "call market".

Explaining 'Walrasian Market'

The NYSE uses a similar process before the opening bell in order to determine opening prices. A specialist will look at all the collected orders for a particular security and select the price that will clear the greatest number of trades. In fact, up until 1871 all trading on the NYSE was executed in this fashion.


Further Reading


Banking, financial intermediation and corporate finance
books.google.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Financial markets and economic development: myth and institutional realityFinancial markets and economic development: myth and institutional reality
books.google.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Volatility, information, and double versus walrasian auction pricing in US and Japanese futures marketsVolatility, information, and double versus walrasian auction pricing in US and Japanese futures markets
www.sciencedirect.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Some considerations on the causes of structural change in financial marketsSome considerations on the causes of structural change in financial markets
www.tandfonline.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Post Walrasian and post Marxian economicsPost Walrasian and post Marxian economics
www.aeaweb.org [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Diversification and competition: financial intermediation in a large Cournot–Walras economyDiversification and competition: financial intermediation in a large Cournot–Walras economy
www.sciencedirect.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Walras' law, Say's law and liquidity preference in general equilibrium analysisWalras' law, Say's law and liquidity preference in general equilibrium analysis
www.jstor.org [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

The economics of markets and platformsThe economics of markets and platforms
onlinelibrary.wiley.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …

Market making by price-setting firmsMarket making by price-setting firms
academic.oup.com [PDF]
… intermediation as a kind of transportation activity is then analysed in a Walrasian model of … The innovations are seen as improving the overall efficiency of the markets and bringing them … of that as well and to consider more explicitly the effects of financial-market innovations on …



Q&A About Walrasian Market


How does Walras' law relate to budget constraints?

Budget constraints imply that the values of excess demand (or, conversely, excess market supplies) must sum to zero regardless of whether the prices are general equilibrium prices. That is

How does the NYSE use this method?

The NYSE uses this method before opening bell in order to determine opening prices.

What is Walras' law?

Walras' law is a principle in general equilibrium theory asserting that budget constraints imply that the values of excess demand (or, conversely, excess market supplies) must sum to zero regardless of whether the prices are general equilibrium prices. That is:

What is a Walrasian market?

A Walrasian market is an economic model of a market process in which orders are collected into batches of buys and sells and then analyzed to determine a clearing price that will decide the market price.

What does "call market" mean?

Call Market means that orders are collected into batches, or calls, of buys and sells and then analyzed to determine a clearing price that will decide the call's final price.

Where did all trading on the NYSE take place until 1871?

All trading on the NYSE took place through call markets until 1871.