Networks and variational inequalities in the formulation and computation of market disequilibria: the case of direct demand functions
In this paper we introduce competitive spatial market models with direct demand functions, which permit policy interventions in the form of price controls. We derive variational inequality formulations of the governing economic conditions and establish existence and uniqueness results. A decomposition algorithm that exploits the network structure is proposed and convergence results given. The algorithm is then interpreted as an adjustment process to highlight the underlying economic behavior. Finally, numerical results for a variety of problems are presented.
Anna Nagurney and Lan Zhou. "Networks and variational inequalities in the formulation and computation of market disequilibria: the case of direct demand functions" Transportation Science 27.1 (1993): 151-161.
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