2019/08/28 by Tomoo Kikuchi, Kikuchi, Tomoo, Kazuo Nishimura +5
Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #Economic theories and models #FOS: Economics and business #General Economics (econ.GN) #Merger and Competition Analysis
paper · pdf · doi:10.48550/arxiv.1908.10557
openalex publication_date 2019/08/28 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We show that competitive equilibria in a range of models related to production networks can be recovered as solutions to dynamic programs. Although these programs fail to be contractive, we prove that they are tractable. As an illustration, we treat Coase's theory of the firm, equilibria in production chains with transaction costs, and equilibria in production networks with multiple partners. We then show how the same techniques extend to other equilibrium and decision problems, such as the distribution of management layers within firms and the spatial distribution of cities.