Postgresql – how to emulate “insert ignore” and “on duplicate key update” (sql merge) with postgresql

Don't use a subselect, rather use the nextval function directly, like this:

update person set unique_number = nextval('number_sequence');

PostgreSQL since version 9.5 has UPSERT syntax, with ON CONFLICT clause. with the following syntax (similar to MySQL)

INSERT INTO the_table (id, column_1, column_2) 
VALUES (1, 'A', 'X'), (2, 'B', 'Y'), (3, 'C', 'Z')
ON CONFLICT (id) DO UPDATE 
  SET column_1 = excluded.column_1, 
      column_2 = excluded.column_2;

Searching postgresql's email group archives for "upsert" leads to finding an example of doing what you possibly want to do, in the manual:

Example 38-2. Exceptions with UPDATE/INSERT

This example uses exception handling to perform either UPDATE or INSERT, as appropriate:

CREATE TABLE db (a INT PRIMARY KEY, b TEXT);

CREATE FUNCTION merge_db(key INT, data TEXT) RETURNS VOID AS
$$
BEGIN
    LOOP
        -- first try to update the key
        -- note that "a" must be unique
        UPDATE db SET b = data WHERE a = key;
        IF found THEN
            RETURN;
        END IF;
        -- not there, so try to insert the key
        -- if someone else inserts the same key concurrently,
        -- we could get a unique-key failure
        BEGIN
            INSERT INTO db(a,b) VALUES (key, data);
            RETURN;
        EXCEPTION WHEN unique_violation THEN
            -- do nothing, and loop to try the UPDATE again
        END;
    END LOOP;
END;
$$
LANGUAGE plpgsql;

SELECT merge_db(1, 'david');
SELECT merge_db(1, 'dennis');

There's possibly an example of how to do this in bulk, using CTEs in 9.1 and above, in the hackers mailing list:

WITH foos AS (SELECT (UNNEST(%foo[])).*)
updated as (UPDATE foo SET foo.a = foos.a ... RETURNING foo.id)
INSERT INTO foo SELECT foos.* FROM foos LEFT JOIN updated USING(id)
WHERE updated.id IS NULL;

See a_horse_with_no_name's answer for a clearer example.