For the dynamic Arrow-Hurwicz model in a discrete-time version from Exercise 4 with subadditive utility functions of traders and the Walrasian equilibrium price vector known from Exercise 2 determine a feasible price trajectory for a few subsequent periods taking some value of parameter  Present a geometric illustration of this trajectory in the state space and in the phase space.

Exercise 2

There is given a market of two traders and two goods described by the static Arrow-Hurwicz model, in which:

Transcribed Image Text:

Oi = 0> 0.