Constructing a set of equilibrium prices in a generalized distributed markets model

M. Zekhov, N. Pilnik and S. Radionov
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M. Zekhov: National Research University Higher School of Economics (HSE University), Moscow, Russia
N. Pilnik: National Research University Higher School of Economics (HSE University), Moscow, Russia
S. Radionov: Lebedev Physical Institute of the Russian Academy of Sciences, Moscow, Russia

Journal of the New Economic Association, 2025, vol. 67, issue 2, 25-44

Abstract: The article discusses the generalization of a distributed markets model that describes the distribution of production volumes, sales, and prices in geographically distant markets. The interaction of agents in the model is described in terms of economic equilibrium, where agents solve their optimization problems, and their decisions must be concerted. Producers in the model are characterized by production capacities and production costs, while consumers are characterized by demand volumes. To describe the interaction between consumers and producers, a matrix of logistic costs for delivering a unit of goods from each producer to each consumer is specified. The existence of equilibrium in the model is proved under certain regularity conditions, and a finite algorithm is proposed to describe the set of equilibrium prices and volumes. The model can be used to study the effects of changes in demand and supply parameters (e. g., due to economic growth or investment in production) as well as the market logistic structure (e. g., due to sanctions).

Keywords: ogistics; spatial models; producer's problem; oligopoly; competition (search for similar items in EconPapers)
JEL-codes: D40 L11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2025:i:67:p:25-44

DOI: 10.31737/22212264_2025_2_25-44

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