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Variational Inequality and Evolutionary Market Disequilibria: The Case of Quantity Formulation

  • M. Milasi
  • C. Vitanza
Part of the Nonconvex Optimization and Its Applications book series (NOIA, volume 79)

Abstract

We consider a time-dependent economic market in presence of excess on the supplies and on the demands and we assume that the demand and supply prices depend on the quantity of supplies and demands. This model generalizes the classic spatial price equilibrium problems and adopts, unchanged, the concept of the equilibrium, namely that at the same time the demand price is equal to the supply price plus the cost of transportation, if there is trade between the pair of supply and demand markets. The equilibrium conditions that describe this “disequilibrium” model are expressed in terms of a time-dependent Variational Inequality for which an existence theorem is shown. Moreover by means of the Lagrangean Theory we find the dual variables which have a remarkable economic meaning.

Keywords

Variational Inequality Transportation Cost Equilibrium Problem Demand Market Demand Excess 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  • M. Milasi
    • 1
  • C. Vitanza
    • 1
  1. 1.Dept. of MathematicsUniversity of MessinaMessinaItaly

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