An Infinite Constrained Game Duality Characterizing Economic Equilibrium
Abstract
The principal economic assumptions of this paper are neoclassical behavior assumptions on a consumer group which owns the resources and a collection of producers employing these resources. A saddle value problem is formulated to characterize equilibrium in the economy in the sense that at equilibrium prices producers determine production plans to maximize profits and that these outputs and inputs are exactly those demanded and supplied respectively by the consumer group. The saddle value problem is shown to be equivalent to a dual pair of uniextremizations termed the consumer group's problem and the producers' problem. The neoclassical economic assumptions yield sufficient conditions which are among the most general ones for guaranteeing a saddle point and simultaneously a perfect duality for the dual programming pair. Economic interpretations are given for all the variables of the consumer group's problem and for all the variables of the producers' problem even at non-optimal stages in each problem. The approach is an infinite dimensional extension of the Charnes' constrained game linear programming equivalents in finite dimensions
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 01, 1980
- Accession Number
- ADA095023
Entities
People
- Abraham Charnes
- K. O. Kortanek
- S. Thore
Organizations
- University of Texas at Austin