Variational Inequality and Evolutionary Market Disequilibria: The Case of Quantity Formulation
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.
KeywordsVariational Inequality Transportation Cost Equilibrium Problem Demand Market Demand Excess
Unable to display preview. Download preview PDF.
- Cammaroto, F. and Di Bella, B., A separation theorem based on the quasi-relative interior and an application to the theory of duality, Preprint.Google Scholar
- Daniele, P. (2001), Variational Inequalities for Static Equilibrium Market. Lagrangean Function and Duality, Equilibrium Problems: Nonsmooth Optimization and Variational Inequality Models, Kluwer Academic Publishers, F. Giannessi-A. Maugeri-P. Pardalos Eds., 43–58.Google Scholar
- Daniele, P., Time-Dependent spatial Price Equilibrium Problem: Existence and Stability results for the Quantity Formulation Model, Journal of Global Optimization, to Appear.Google Scholar
- Daniele, P. and Maugeri, A. (2001), On Dynamical Equilibrium Problems and Variational Inequalities, Equilibrium Problems: Nonsmooth Optimization and Variational Inequality Models, Kluwer Academic Publishers, F. Giannessi-A. Maugeri-P. Pardalos Eds., 59–69.Google Scholar