Optimal and competitive programs in reachable multi sector models

DOI10.1007/S001990050340MaRDI QIDQ1817963zbMATH OpenOpenAlexFDO

Authors Swapan Dasgupta, Tapan Mitra

Publication date 9 February 2001

Published in Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/s001990050340

zbMATH Keywords

competitive programexpandable and contractable programsoptimality conditionsreachability

Mathematics Subject Classification ID

Special types of economic markets (including Cournot, Bertrand) (91B54) Economic growth models (91B62) Multisectoral models in economics (91B66)

Review text

The problem under consideration is the condition ensuring optimality in the sense of discounted consumption welfare for competitive infinite horizon programs in multi-sector economic models. The authors use the general model as a triplet \((\Omega, w, \delta)\). Here \(\Omega\) is a subset of \(\mathbb{R}^n_+ \times \mathbb{R}^n_+\), welfare function \(w:\mathbb{R}^n_+\to \mathbb{R}\) and \(\delta\) stands for the discount factor. Elements of \(\Omega\) are ordered pairs \((x,y)\), where \(x\) stands for the initial stock of inputs and \(y\) stands for the final output. The triplet is subjected by rather common assumptions that are fulfilled for the main classes of models: Simple Leontief, General Linear and nonlinear ones that are described by production functions. A new variant of a reachability condition for the economic dynamic model is introduced. The essence of the property is: the technological production possibilities are such that, beginning with a capital stock from which expansion of stocks are feasible, it is possible to attain the stocks along any feasible program. The main result of the paper is the statement that under the reachability condition a competitive program from any state \(\widetilde y\in \mathbb{R}^n_+\) corresponding to some prices is an optimal one from \(\widetilde y\). Some examples with models mentioned above illustrate the assumptions and the main result.

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Cited in

(5)

• Intertempordal optimality in a closed linear model of production
• On the existence of weakly maximal programs for a multisector economy with consumption
• Infinite-horizon competitive programs are optimal
• Multilevel programming, rational reaction sets, and efficient solutions
• Optimal Programs and Their Price Characterization in a Multisector Growth Model with Uncertainty

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