General economic equilibrium and variational inequalities

General economic equilibrium and variational inequalities

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Article ID: iaor1992988
Country: Netherlands
Volume: 10
Issue: 7
Start Page Number: 369
End Page Number: 376
Publication Date: Oct 1991
Journal: Operations Research Letters
Authors: ,
Abstract:

In this paper the authors apply the theory of variational inequalities to the general economic equilibrium problem. Qualitative properties of existence and uniqueness are established. Then the decomposition algorithm for the computation of the equilibrium point is proposed which decomposes the general economic equilibrium problem in two parts: in the first part, the equilibrium price is determined as a solution of a variational inequality with a compact feasible set; in the second part, the equilibrium activity level is determined as a solution of a set of linear inequalities. Finally, the convergence of the algorithm is established.

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