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Competitive Equilibrium in a Radial Network


  • Cho, In-Koo


In a competitive market over a network with finite capacity, we can focus without loss of generality on simple allocations, where the net transaction over a link is equal to the gross transaction over the same link. If a simple allocation can be sustained by an equilibrium, then the allocation is efficient. If an equilibrium allocation is equivalent to a simple allocation and if the simple allocation is no longer sustained by an equilibrium, then the original equilibrium allocation is not efficient. For any efficient allocation, an equivalent simple allocation exists that can be sustained by a competitive equilibrium. Copyright 2003 by the RAND Corporation.

Suggested Citation

  • Cho, In-Koo, 2003. " Competitive Equilibrium in a Radial Network," RAND Journal of Economics, The RAND Corporation, vol. 34(3), pages 438-460, Autumn.
  • Handle: RePEc:rje:randje:v:34:y:2003:i:3:p:438-60

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    References listed on IDEAS

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    8. Dov Fried, 1984. "Incentives for Information Production and Disclosure in a Duopolistic Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 99(2), pages 367-381.
    9. Hurdle, Gloria J, et al, 1989. "Concentration, Potential Entry, and Performance in the Airline Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 119-139, December.
    10. Gelfand, Matthew D. & Spiller, Pablo T., 1987. "Entry barriers and multiproduct oligopolies: Do they forebear or spoil?," International Journal of Industrial Organization, Elsevier, vol. 5(1), pages 101-113, March.
    11. James A. Brander & Anming Zhang, 1990. "Market Conduct in the Airline Industry: An Empirical Investigation," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 567-583, Winter.
    12. Douglas W. Caves & Laurits R. Christensen & Michael W. Tretheway, 1984. "Economies of Density versus Economies of Scale: Why Trunk and Local Service Airline Costs Differ," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 471-489, Winter.
    13. Carl Shapiro, 1986. "Exchange of Cost Information in Oligopoly," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 433-446.
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    Cited by:

    1. Holmberg, Pär & Lazarczyk, Ewa, 2012. "Congestion Management in Electricity Networks: Nodal, Zonal and Discriminatory Pricing," Working Paper Series 915, Research Institute of Industrial Economics.
    2. Pär Holmberg and Ewa Lazarczyk, 2015. "Comparison of congestion management techniques: Nodal, zonal and discriminatory pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    3. Juan Escobar & Alejandro Jofré, 2010. "Monopolistic competition in electricity networks with resistance losses," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 44(1), pages 101-121, July.
    4. Hu, X. & Ralph, D. & Ralph, E.K. & Bardsley, P. & Ferris, M.C., 2004. "Electricity Generation with Looped Transmission Networks: Bidding to an ISO," Cambridge Working Papers in Economics 0470, Faculty of Economics, University of Cambridge.
    5. Pär Holmberg & Andy Philpott, 2014. "Supply function equilibria in transportation networks," Cambridge Working Papers in Economics 1421, Faculty of Economics, University of Cambridge.
    6. Kim, Hyunsook & Kim, Sung-Soo, 2010. "The optimal fuel mix and redistribution of social surplus in the Korean power market," Energy Policy, Elsevier, vol. 38(12), pages 7929-7938, December.

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