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Note on the path following approach of equilibrium programming

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Abstract

Recently Zangwill and Garcia introduced a general formulation of equilibrium problems. To prove the existence of an equilibrium they discussed a path following procedure. In this note we consider the application to the exchange economy problem. An economic equilibrium may be found by applying a simplicial variable dimension algorithm developed by Van der Laan and Talman.

We will show that when an approriate triagulation and labelling rule is taken the limiting path of this algorithm coincides with the adjustment process induced by the procedure of Zangwill and Garcia. This process has a plausible economic interpretation and is an attractive alternative for the well-known tâtonnement process.

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References

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Authors and Affiliations

  1. Department of Actuarial Sciences and Econometrics, Free University, Amsterdam, The Netherlands

    G. van der Laan

  2. Department of Econometrics, Tilburg University, Tilburg, The Netherlands

    A. J. J. Talman

Authors
  1. G. van der Laan
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  2. A. J. J. Talman
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van der Laan, G., Talman, A.J.J. Note on the path following approach of equilibrium programming. Mathematical Programming 25, 363–367 (1983). https://doi.org/10.1007/BF02594787

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  • DOI: https://doi.org/10.1007/BF02594787

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