Pub. date: 2008 | Online Pub. Date: October 22, 2007 | DOI: 10.4135/9781412956260 | Print ISBN: 9781412916523 | Online ISBN: 9781412956260| Publisher:SAGE Publications, Inc.About this encyclopedia
Equilibrium is a condition of balance in which all influences on a system are held in check and no change occurs. Disequilibrium is the condition of change resulting from some alteration in these influences. Market equilibrium, Nash equilibrium (NE), and reflective equilibrium are the three prevalent types in economic, strategic, and ethical analyses, respectively. Economists distinguish between general and partial equilibrium analyses in market systems. Partial equilibrium analysis examines individual markets or the decisions of particular firms or households, holding constant other considerations actually varying in general equilibrium analysis. Such partial analysis can therefore be wrong. General or static equilibrium represents the condition in which the equality of all quantities of supply and demand yields no incentive for market behavior to change. If supply exceeds demand, business production will increase. Business will lower product price until equality in supply and demand is restored to stable equilibrium. In supply-demand models, a ...