 A Dispersed Equilibrium Commodity Trade ModelJohn R Roy The Annals of Regional Science, 1990, vol. 24, issue 1, 13-28 Abstract: For many bulk commodities, such as mineral ores, crude oil, building materials and food grains, the suppliers are increasingly in the position of being price-takers. This means that, in the short run, their main decisions relate to spatial choice of markets and setting of production levels within the currently available capacity. In this paper, an entropy maximization framework is introduced to handle dispersion about the profit-maximizing choice of markets and production levels by the suppliers. The model also uses information theory to implicitly account for certain rigidities in trading relationships resulting from non-price factors. Although demand functions must be provided exogenously, cost functions can be inferred from regional vintage production data, which in turn allow profit functions to be defined for each producing region or country. A unique and stable dispersed price equilibrium of the Walrasian type is established for this spatial system under quite general conditions. Date: 1990 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:24:y:1990:i:1:p:13-28 Ordering information: This journal article can be ordered from Access Statistics for this article The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC. |
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