Invited Session Thu.2.H 3027

Thursday, 13:15 - 14:45 h, Room: H 3027

Cluster 7: Finance & economics [...]

Optimization and economic applications


Chair: Kenneth Judd



Thursday, 13:15 - 13:40 h, Room: H 3027, Talk 1

Sebastián Lozano
Choosing the best partner for a horizontal cooperation


In this paper Data Envelopment Analysis is used to select among different potential partners to form a joint venture which is the one that best fits the strategic goal of a horizontal cooperation. Since each potential partner has a different technology the one whose technology better complements ours is the one that will bring the greatest synergy to the technology of the joint venture. Models for the cases that the joint venture is planning to open one or several facilities are presented. A priori and ex-post measures of synergy between the partners are proposed. Also, a simple way of sharing the costs of the horizontal cooperation based on cooperative game theory is presented.



Thursday, 13:45 - 14:10 h, Room: H 3027, Talk 2

Xiaoxuan Meng
An interior-point path-following method for computing equilibria of an exchange economy with linear production technologies

Coauthor: Chuangyin Dang


The computation of economic equilibria plays an important role in all applications of general economic equilibrium model.
Despite the fact that some numerical methods have been proposed, how to compute economic equilibria efficiently remains a challenging issue. In this paper, we develop an interior-point path-following method for computing economic equilibria of an exchange economy with linear production technologies. The peculiar characteristic of our method is that we convert an exchange economy with linear production technologies to a pure exchange economy by ways of allocating the production to consumers' endowments evenly. Resorting to an extra variable, we devise a new economy which deforms from a trivial exchange economy to the original one while the variable varies from 0 to 1. An application of Sard's theorem and perturbations leads to the existence of a smooth interior-point path, which starts from the unique equilibrium of the exchange economy and leads to an economic equilibrium of the exchange economy with linear production technologies. A predictor-corrector method is proposed to numerically follow the path. Efficiency of the method is demonstrated through numerical examples.



Thursday, 14:15 - 14:40 h, Room: H 3027, Talk 3

Nasser-Eddine Tatar
Asymptotic stability for the endogenous Solow model with discrete and distributed delays


In the original Solow growth theory it is assumed that the rate of change of the labour supply is exogenous. This theory has serious limitations (failure to tale account of entrepreneurships and strength institutions and failure to explain technological progress) which lead to the development of endogenous growth theories. These theories support that long-run economic growth depends on forces internal to
the economic system which create technological progress.
In this talk we consider a (more realistic) Solow model where the labour supply depends on the past levels of wage. We discuss both the discrete delay case and the distributed delay case. This latter model is known as the Vintage Capital Model and is widely used in economy. We shall establish some reasonable assumptions under which the economy converges to a steady-state rate of growth.


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