A mean field model for the interactions between firms on the markets of their inputs

arXiv2207.05411MaRDI QIDQ6404692FDOQ6404692

Authors: Yves Achdou, Guillaume Carlier, Quentin Petit, Daniela Tonon 

Publication date: 12 July 2022

Abstract: We consider an economy made of competing firms which are heterogeneous in their capital and use several inputs for producing goods. Their consumption policy is fixed rationally by maximizing a utility and their capital cannot fall below a given threshold (state constraint). We aim at modeling the interactions between firms on the markets of the different inputs on the long term. The stationary equlibria are described by a system of coupled non-linear differential equations: a Hamilton-Jacobi equation describing the optimal control problem of a single atomistic firm; a continuity equation describing the distribution of the individual state variable (the capital) in the population of firms; the equilibria on the markets of the production factors. We prove the existence of equilibria under suitable assumptions.

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