Competitive equilibrium in a radial network

In Koo Cho

Research output: Contribution to journalArticlepeer-review

Abstract

In a competitive market over a network with finite capacity, we can focus without loss of generality on simple allocations, where the net transaction over a link is equal to the gross transaction over the same link. If a simple allocation can be sustained by an equilibrium, then the allocation is efficient. If an equilibrium allocation is equivalent to a simple allocation and if the simple allocation is no longer sustained by an equilibrium, then the original equilibrium allocation is not efficient. For any efficient allocation, an equivalent simple allocation exists that can be sustained by a competitive equilibrium.

Original languageEnglish (US)
Pages (from-to)438-460
Number of pages23
JournalRAND Journal of Economics
Volume34
Issue number3
DOIs
StatePublished - 2003

ASJC Scopus subject areas

  • Economics and Econometrics

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