Open Yale CoursesECON 251: Financial TheoryLecture 2 - Utilities, Endowments, and Equilibrium<< previous session| next session >>Overview:This lecture explains what an economic model is, and why it allows for counterfactual reasoning and oftenyields paradoxical conclusions. Typically, equilibrium is defined as the solution to a system of simultaneousequations. The most important economic model is that of supply and demand in one market, which wasunderstood to some extent by the ancient Greeks and even by Shakespeare. That model accurately fits theexperiment from the last class, as well as many other markets, such as the Paris Bourse, online trading, the
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This note was uploaded on 02/08/2012 for the course ECON 251 taught by Professor Geanakoplos,john during the Fall '09 term at Yale.