A solution condition for complementarity problems: With an application to spatial price equilibrium (Q798262)

The paper gives a sufficient condition for the existence of solutions to the nonlinear complementarity problem (find a nonnegative vector x whose image by a given continuous function is both nonnegative, and orthogonal to x). This existence condition is shown to be weaker than the coerciveness condition. The result is applied to the following problem in spatial equilibrium: Given a commodity sold on a number of markets linked by a common transportation network, find a vector of prices and a vector of flows such that trading between each pair of markets is efficient, and such that supply equals demand in each market. Previous work proved the existence of such a spatial price equilibrium under the assumption of bounded demand. As shown by the author, the new existence condition for the complementarity problem makes that assumption unnecessary.