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Equilibrium and Linear Complementarity — An Economy with Institutional Constraints on Prices

  • Terje Hansen
  • Alan S. Manne
Part of the Theory and Decision Library book series (TDLU, volume 13)

Abstract

In the theory of perfect competition, it is supposed that there are no institutional restrictions upon prices. Much the same assumption is built into mathematical programming models. The presence of such constraints implies, for example, that the market price and the marginal productivity (shadow price) of the factors of production will not necessarily coincide. Unless such constraints are introduced, models cannot explain the simultaneous existence of excess supply of an item and yet a positive market price.

Keywords

Market Price Linear Complementarity Problem Shadow Price Excess Supply Institutional Constraint 
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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Bibliography

  1. [1]
    Hansen, Terje and Mathiesen, Lars, ‘Generating Stationary Points for a Non-Concave Quadratic Program by Lenke’s almost Complementary Pivot Algorithm’, Discussion Papers 11/73, Norwegian School of Economics and Business Administration, 5000 Bergen, Norway.Google Scholar

Copyright information

© D. Reidel Publishing Company, Dordrecht, Holland 1977

Authors and Affiliations

  • Terje Hansen
    • 1
  • Alan S. Manne
    • 1
  1. 1.Norwegian School of Economics and Business Adm.BergenNorway

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