Spatial Equilibrium and Programming Models

While a common element of the above models is examining market behavior over time, another class of economic models is concerned with models describing commodity process at one point in time or representing commodity transfers over space. Such a modeling approach has been applied to both mineral and energy industries and derives from classical activity analysis or mathematical programming models. The methodology of linear and nonlinear programming and numerous practical applications are described by Dantzig (1963), Wagner (1969) and more recently Brooke et al. (1988). These kinds of models have been applied to mineral and energy markets in the form of linear or transportation programming, process programming, quadratic programming, mixed integer programming, linear complementarily programming, and variational inequalities. Further analysis of this approach can be found in Labys, Takayama and Uri (1989) and Labys and Yang (1991, 1997).