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Constructing and Applying Objective Functions pp 408–419Cite as

Social Equilibria for Competitive Resource Allocation Models

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Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE,volume 510)

Abstract

We study multistage models of resource allocation with several agents. Individual interests of agents are determined with their private objective functions, given by discounted sums of one-step utilities over the whole period of planning. Social preferences are expressed with public objective functions. We define the utility functions in such a way that aggregation of individual utilities results in the exponential public utility. Constructed private objective functions are competitive in the sense that the actions of agents affect the incomes of partners. Consequently, these models are treated as non- cooperative dynamic games. We construct the Nash equilibria for these games satisfying the criteria of maximization of public utility. Both finite and infinite horizons of planning are examined.

Keywords

  • Resource allocation
  • private and public objective functions
  • private and public utility functions
  • non-cooperative dynamic game
  • Nash equilibria

This study was supported by the grant N 00-02-00202a of Russian Humanities Foundation which is gratefully acknowledged.

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Author information

Authors and Affiliations

  1. St. Petersburg Institute for Economics and Mathematics, Russian Academy of Sciences Tchaikovskogo 1, St.Petersburg, 191187, Russia

    Victor Domansky & Victoria Kreps

Authors
  1. Victor Domansky
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  2. Victoria Kreps
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Editor information

Editors and Affiliations

  1. University of Hagen ESG, Feithstrasse 140, 58084, Hagen, Germany

    PD Dr. Dr. Andranik S. Tangian & Prof. Dr. Dr. Dr. h.c. Josef Gruber & 

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© 2002 Springer-Verlag Berlin Heidelberg

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Domansky, V., Kreps, V. (2002). Social Equilibria for Competitive Resource Allocation Models. In: Tangian, A.S., Gruber, J. (eds) Constructing and Applying Objective Functions. Lecture Notes in Economics and Mathematical Systems, vol 510. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-56038-5_21

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  • DOI: https://doi.org/10.1007/978-3-642-56038-5_21

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-42669-1

  • Online ISBN: 978-3-642-56038-5

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