Computational experience in solving equilibrium models by a sequence of linear complementarity problems. Technical report SOL 83-1
This paper presents a modelling format for partial and general economic equilibrium problems. It reports on computational experience from a series of small to medium sized problems taken from the literature on computation of economic equilibria. The common characteristic of these models is the presence of weak inequalities and complementary slackness, e.g., a linear technology with alternative activities or various institutional constraints on prices. The equilibrium is computed by solving a sequence of linear complementarity problems (LCP). The iterative (outer) part of this algorithm is a Newton process, while for the inner part we use Lemke's almost complementary pivoting algorithm. Theoretical results for the performance of this algorithm are at present not complete. The computational experience, however, is encouraging. First, the algorithm has solved nine test problems when initiated at reasonable starting points. Five problems are solved for different starting points. This indicates a large region over which the algorithm converges. Next, it is shown that the process is economical in terms of the number of pivots, function evaluations and computer time.
- Research Organization:
- Stanford Univ., CA (USA). Systems Optimization Lab.
- DOE Contract Number:
- AT03-76ER72018
- OSTI ID:
- 6028343
- Report Number(s):
- DOE/ER/72018-T9; ON: DE83011189
- Country of Publication:
- United States
- Language:
- English
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ALGORITHMS
ECONOMICS
EQUILIBRIUM
ITERATIVE METHODS
LINEAR PROGRAMMING
MATHEMATICAL LOGIC
MATHEMATICAL MODELS
NEWTON METHOD
PROGRAMMING