Supply and Demand Equilibration Algorithms for a Class of Market Equilibrium Problems

Abstract

In this paper, we describe a family of progressive equilibration algorithms which can be used to solve a variety of market equilibrium problems such as the general spatial price equilibrium problem, the single price spatial price equilibrium problem, etc. They are relaxation-type algorithms which attempt to equilibrate the whole system by equilibrating successively each supply market (producer), or each demand market (consumer). One noteworthy feature of these algorithms is that, due to the special structure of the problem, the restricted equilibrium for each supply market (or demand market) can be obtained explicitly in closed form; another feature is that they are intuitive and straightforward to implement. Moreover, the computational results demonstrate that the algorithms are efficient and suitable for large-scale problems.