John Whalley, Philip M. White, A Decomposition Algorithm for General Equilibrium Computation with Application to International Trade Models: A Correction, Econometrica, Vol. 53, No. 3 (May, 1985), p. 679

Examines the sequences of economies constructed by successive sampling from any characteristics of agents. In this paper author considers closeness of commodity bundles to demand sets, dependency of the agents bundles on convexity, relationship between core allocations and demand sets.

In a series of eleven markets, sellers possessed products that were exogenously designated as either grade "regular" or grade "super." Supers were valued more by buyers but grade could not be observed by buyers prior to purchase. Sellers could add costly units of quality to their products that were observable and valued by buyers. The data are analyzed with perfect information models, signaling equilibrium models, and pooling models. A variety of behaviors are observed across the eleven markets. Signaling is observed in most markets with some markets approaching the most efficient signaling equilibrium. Pooling or partial pooling occurs in a few markets. The performance seems to be sensitive to the relative cost of signaling and the market institutional setting.

Different definitions of noncausality (according to Granger, Sims, Haugh and Pierce,...) are analyzed in terms of orthogonality in the Hilbert space of square integrable variables. Conditions, when necessary, are given for their respective equivalence. Some problems of testability are mentioned. Finally noncausality is also analyzed in terms of rational expectations, extending previous results of Sims. (Author)