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A network equilibrium formulation of market disequilibrium and variational inequalities
Author(s) -
Nagurney Anna,
Zhao Lan
Publication year - 1991
Publication title -
networks
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.977
H-Index - 64
eISSN - 1097-0037
pISSN - 0028-3045
DOI - 10.1002/net.3230210108
Subject(s) - disequilibrium , variational inequality , mathematical optimization , convergence (economics) , computation , computer science , exploit , mathematical economics , mathematics , economics , algorithm , medicine , ophthalmology , economic growth , computer security
Abstract In this article, we consider an asymmetric market disequilibrium model in a spatial setting in the case of rigid prices and/or controls. In this problem, the markets need no longer clear. We show that the disequilibrium problem can be reformulated as an equilibrium problem over an abstract network with special structure. We then propose a network decomposition algorithm for the computation of the solution that exploits the structure and establishes convergence results using the theory of variational inequalities. Our computational results demonstrate the suitability of this approach for large‐scale market problems.