Candogan, Ozan; Epitropou, Markos and Vohra, Rakesh V. (August 2016) Competitive Equilibrium and Trading Networks: A Network Flow Approach. Former Series > Working Paper Series > IHS Economics Series 323, 20 p.
es-323.pdf - Published Version
Download (487kB) | Preview
![user_agreement_es323.pdf [thumbnail of user_agreement_es323.pdf]](https://irihs.ihs.ac.at/style/images/fileicons/text.png)
user_agreement_es323.pdf - Supplemental Material
Restricted to repository staff only
Download (352kB) | Request a copy
Abstract
Under full substitutability of preferences, it has been shown that a competitive equilibrium exists in trading networks, and is equivalent (after a restriction to equilibrium trades) to (chain) stable outcomes. In this paper, we formulate the problem of finding an efficient outcome as a generalized submodular flow problem on a suitable network. Equivalence with seemingly weaker notions of stability follows directly from the optimality conditions, in particular the absence of improvement cycles in the flow problem. Our formulation yields strongly polynomial algorithms for finding competitive equilibria in trading networks, and testing (chain) stability.
Item Type: | IHS Series |
---|---|
Keywords: | Trading Networks, Competitive Equilibrium, Stability, Submodular Flow Problems, Discrete Convexity |
Date Deposited: | 04 Aug 2016 07:34 |
Last Modified: | 19 Sep 2024 13:03 |
ISSN: | 1605-7996 |
URI: | https://irihs.ihs.ac.at/id/eprint/4027 |