Article ID: | iaor19971901 |
Country: | Netherlands |
Volume: | 68 |
Issue: | 1 |
Start Page Number: | 281 |
End Page Number: | 300 |
Publication Date: | Nov 1996 |
Journal: | Annals of Operations Research |
Authors: | Nagurney Anna, Nicholson Charles F., Bishop Phillip M. |
Keywords: | computational analysis: parallel computers |
In this paper, the authors develop a perfectly competitive spatial equilibrium model in price and quantity variables in the presence of discriminatory ad valorem tariffs, a widely used trade policy instrument. They derive the equilibrium conditions and formulate them as a variational inequality problem. An algorithm is then proposed for the computation of the equilibrium pattern and convergence results established. The algorithm resolves the problem into very simple subproblems, each of which can be solved simultaneously and in closed form. Finally, the algorithm is implemented on the massively parallel Thinking Machines CM-2 and CM-5 architectures, known as the Connection Machines, and numerical results presented.