Non-blocking supervisory control of dynamic competitive markets

A competitive market is representative of the free market economy where it is well known that an invisible hand (also referred to as the Walrasian auctioneer) always achieves an equilibrium of demand and supply. In this study, the dynamic behaviours of supply and demand of a competitive market are modelled by finite-state automata. Using the discrete event models, this study shows that a competitive market controlled by the Walrasian auctioneer may fail in leading to equilibria. However, the Walrasian auctioneer can always achieve equilibria through a non-blocking supervisory control together with a government policy.