An adjustment process for nonconvex production economies

We prove the existence of a path of market conditions, i.e. combinations of market prices and production quantities, that links any arbitrarily chosen market condition with an equilibrium, in a general equilibrium model with possibly nonconvex production technologies based on Villar (1994) and Villar (1999). This existence theorem holds for any semi-algebraic version of the model, and the adjustment of market conditions along the path can be given an economic interpretation as a tâtonnement process. Any such path can be approximated arbitrarily close by applying a simplicial algorithm. By restarting this algorithm in a different market condition, we may find more than one equilibrium.

van den Elzen, Antoon and Johannes Kremers (2006), An adjustment process for nonconvex production economies, Journal of Mathematical Economics 42 , 1-13