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A Variational Inequality Scheme for Determining an Economic Equilibrium of Classical or Extended Type

  • A. Jofre
  • R. T. Rockafellar
  • R. J. -B. Wets
Part of the Nonconvex Optimization and Its Applications book series (NOIA, volume 79)

Abstract

The existence of an equilibrium in an extended Walrasian economic model of exchange is confirmed constructively by an iterative scheme. In this scheme, truncated variational inequality problems are solved in which the agents’ budget constraints are relaxed by a penalty representation. Epi-convergence arguments are employed to show that, in the limit, a virtual equilibrium is obtained, if not actually a classical equilibrium. A number of technical hurdles are, in this way, surmounted.

Key words

variational inequalities Walras exchange equilibrium virtual equilibrium epi-convergence penalization equilibrium computations 

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Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  • A. Jofre
    • 1
  • R. T. Rockafellar
    • 2
  • R. J. -B. Wets
    • 3
  1. 1.Center for Mathematical Modelling and Dept. of Mathematical EngineeringUniversity of ChileSantiagoChile
  2. 2.Dept. of MathematicsUniversity of WashingtonSeattleUSA
  3. 3.Dept. of MathematicsUniversity of CaliforniaDavisUSA

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