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2005
Springer

Exchange Market Equilibria with Leontief's Utility: Freedom of Pricing Leads to Rationality

10 years 7 months ago
Exchange Market Equilibria with Leontief's Utility: Freedom of Pricing Leads to Rationality
This paper studies the equilibrium property and algorithmic complexity of the exchange market equilibrium problem with concave piece-wise linear functions, which include linear and Leontief’s utility functions as special cases. We show that the Fisher model again reduces to the weighted analytic center problem, and the same linear programming complexity bound applies to computing its equilibrium. However, the story for the Arrow-Debreu model with Leontief’s utility becomes quite different. We show that, for the first time, solving this class of Leontief exchange economies is equivalent to solving a linear complementarity problem whose algorithmic complexity is finite but not polynomially bounded.
Yinyu Ye
Added 28 Jun 2010
Updated 28 Jun 2010
Type Conference
Year 2005
Where WINE
Authors Yinyu Ye
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