New Economic Interpretations of Complementarity Problems.

The economic literature which employs a quadratic programming (QP) framework, has adopted--apparently without exception--the asymmetric version of this programming structure. In such a specification, the constraints employed in primal and dual problems are structurally different, with one set involv...

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Publicado en:Southern Economic Journal Vol. 46; no. 2; pp. 568 - 580
Autor principal: Paris, Quirino
Formato: Artículo
Publicado: Wiley-Blackwell Oct79
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: New Economic Interpretations of Complementarity Problems.
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        Quadratic programming
        Linear complementarity problem
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          Quadratic programming
          Linear complementarity problem
      ab: The economic literature which employs a quadratic programming (QP) framework, has adopted--apparently without exception--the asymmetric version of this programming structure. In such a specification, the constraints employed in primal and dual problems are structurally different, with one set involving only primal variables while the other contains both primal and dual variables. The interpretations of economic problems appeared in the literature and based upon these quadratic programming structures are also asymmetric. In the context of activity analysis, for example, only problems admitting downward sloping demand functions for commodities produced and constant supply functions for commodities used as limiting resources have been analyzed by quadratic programming. Another important example can be found in the area of risk analysis. To date, only stochastic revenues have been studied using the mean-variance approach described by quadratic programming: it was always assumed necessary to consider as nonstochastic the cost of limiting resources. <BR> Linear complementarity problems provide a wide range of mathematical programming structures, all interesting and useful in interpreting and solving economic problems. To date, the most general and flexible of such programming structures have remained largely unexplored in both methodological and empirical ambits. In particular, symmetric quadratic programming appears to be a promising specification whenever linear complementarity structures may be used to describe economic problems. <BR> It is important to note that the symmetry of the QP model does not require the symmetry of the semidefinite matrices D and E, unless one is interested in measuring consumers and producers surpluses. In a general equilibrium analysis, the symmetry of the price slopes in the demand functions is necessary to fulfill the integrability conditions of the consumers' preferences, but it is not required of the system of Marshallian demand...
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    language: English
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