AN ALGORITHM FOR THE SPATIAL PRICE EQUILIBRIUM PROBLEM ON A GENERAL NETWORK IN THE SPACE OF THE PATH FLOWS

The spatial price equilibrium on a general network may be formulated as a nonlinear‐cost mathematical programming problem with simple constraints, when the decision variables are the path flows. The solution of this problem is difficult due to the very large number of variables (paths) and the impra...

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Bibliographic Details
Published in:Journal of regional science 1991-05, Vol.31 (2), p.171-190
Main Authors: Drissi-Kaïtouni, Omar, Florian, Michael
Format: Article
Language:English
Subjects:
Algorithms
Bgi / Prodig
Economic statistics
Economic theory
Equilibrium
General methodology
Mathematical programming
Mathematical techniques and physical analogs
Mathematics
Prices
Studies
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Summary:The spatial price equilibrium on a general network may be formulated as a nonlinear‐cost mathematical programming problem with simple constraints, when the decision variables are the path flows. The solution of this problem is difficult due to the very large number of variables (paths) and the impracticality of generating all the paths from all the origins to all the destinations. In this paper, we develop a Gauss‐Seidel‐Newton Projection algorithm and combine it with a restriction strategy. That makes it unnecessary to generate a priori all the paths. This algorithm may be further improved by exploiting the equivalence between the spatial price equilibrium on a general network and the network equilibrium. Computational results that we present in this paper demonstrate the efficiency of the proposed solution algorithms.
ISSN:0022-4146
1467-9787
DOI:10.1111/j.1467-9787.1991.tb00141.x