Bifurcations in the Solution Structure of Market Equilibrium Problems

F. Etbaigha () and M. Cojocaru ()
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F. Etbaigha: University of Guelph
M. Cojocaru: University of Guelph

A chapter in Mathematical and Computational Approaches in Advancing Modern Science and Engineering, 2016, pp 537-548 from Springer

Abstract: Abstract In this study, the well-known market disequilibrium model with excess supply and demand is investigated to determine if it exhibits changes in the structure and the number of equilibrium states for specific choices of parameter values. We propose to examine the effects of changing separately each price functions and unit transaction cost functions. We study the bifurcation problem (i.e., qualitative change in equilibrium states) as a parametrized variational inequality problem (VI). We conduct our analysis based on modeling the markets via a projected dynamical system (PDS), which is a type of constraint ordinary differential equations whose critical points are the market equilibrium states of the economic model. Numerical simulation for two examples is carried out to see if and when the behavior of these market steady states exhibits any qualitative change.

Keywords: Variational Inequality; Market Equilibrium; Price Function; Excess Supply; Supply Market (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-30379-6_49

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DOI: 10.1007/978-3-319-30379-6_49

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