Computing Economic Equilibria on Affine Networks with Lemke's Algorithm

descriptionPublicationkeyboard_double_arrow_right Article 01 Aug 1979 English Publisher:Institute for Operations Research and the Management Sciences (INFORMS)Journal:Mathematics of Operations Research, volume 4, pages 209-214 (issn: 0364-765X, eissn: 1526-5471,

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Authors: Richard Asmuth; B. Curtis Eaves; Elmor L. Peterson;

doi: 10.1287/moor.4.3.209

Computing Economic Equilibria on Affine Networks with Lemke's Algorithm

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Abstract

Consider a multicommodity transhipment problem where the prices at each location are an affine function of the supplies and demands at that location and the shipping costs are an affine function of the quantities shipped. A system of prices, supplies, demands, and shipments is defined to be an equilibrium, if there is a balance in the shipments, supplies, and demands of goods at each location, if local prices do not exceed the cost of importing, and if shipments are price efficient. Lemke’s algorithm is used to compute an equilibrium.

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Keywords

multicommodity transhipment problem, Applications of mathematical programming, Mathematical economics, logistics, Lemke's algorithm, supply and demand of goods, Inventory, storage, reservoirs, equilibrium computation, resource distribution

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