Discrete Economy

I've made some software I've written available here. See the file README for some useful information on getting started.

The DiscreteEconomy package requires Matlab 5.0 or better to run, but permits one to find the set of constrained efficient allocations for a very general set of dynamic, discrete economies.

This code is still under development; there are numerous rough spots and probably a bug or two. Please let me know if you use the software, as well as successes, failures, and frustrations.

The basic idea is to define the choice objects in the economy to be probability mass functions over every possible state. Since, roughly, 'the world is linear in probabilities,' one can find optimal allocations by finding the solution to a linear program (for a one period economy) or as the limiting solution to a sequence of linear programs (in the case of a dynamic economy.

For some papers that exploit this technology, see