Spatial economic networks with multicriteria producers and consumers: Statics and dynamics |
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Authors: | Anna Nagurney Ding Zhang June Dong |
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Affiliation: | (1) Department of Finance and Operations Management, Isenberg School of Management, University of Massachusetts, Amherst, MA 01003, USA (e-mail: nagurney@gbfin.umass.edu), US;(2) Department of Marketing and Management, School of Business, State University of New York at Oswego, Oswego, NY 13126, USA, US |
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Abstract: | In this paper, we develop a framework for the formulation, analysis, and computation of solutions to spatial network problems
in which the firms are multicriteria decision-makers and the consumers are as well. In particular, the firms, which are involved
in the production of a homogeneous commodity, are spatially separated and weight the two criteria of profit maximization and
total output maximization in distinct fashion. They are faced with the selection of modes/routes (which are modeled in an
aggregated manner) to transport the commodity to the demand markets where consumers, consisting of different classes, consider
the price charged by the producers and weight the transportation cost and the transportation time of the product on the links
in an individual manner. We derive the governing equilibrium conditions and present the variational inequality formulation.
We provide qualitative properties of the equilibrium commodity shipment and generalized price pattern and then propose a tatonnement
process, which we formulate as a projected dynamical system. We give an algorithm for computational purposes and apply it
to several numerical examples for illustration purposes. This paper is the first to integrate multicriteria decision-making
on the production side and on the consumption side in a basic network context.
Received: February 2001/Accepted: August 2001 |
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Keywords: | JEL classification: C61 C62 C63 D50 L13 R10 |
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