TY - JOUR
T1 - Financial networks with intermediation and transportation network equilibria
T2 - A supernetwork equivalence and reinterpretation of the equilibrium conditions with computations
AU - Liu, Zugang
AU - Nagurney, Anna
N1 - Funding Information:
Acknowledgements This research was supported, in part, by NSF Grant No. IIS-0002647. The research of the second author was also supported, in part, by the Radcliffe Institute for Advanced Study at Harvard University under its 2005–2006 Radcliffe Fellows Program. This support is gratefully acknowledged and appreciated. This paper is dedicated to the memory of George B. Dantzig, Christopher B. Winsten, and C. Bart McGuire, who passed away on May 13, 2005, May 28, 2005, and January 23, 2006, respectively. Their work has made a remarkable impact on both theory and practice of operations research/management science and transportation science and the authors of this paper acknowledge their scholarship and humanity with great gratitude. The authors thank the three anonymous referees for helpful comments and suggestions on an earlier version of this paper.
PY - 2007/7
Y1 - 2007/7
N2 - In this paper, we consider two distinct classes of network problems - financial networks with intermediation and with electronic transactions and transportation network equilibrium problems, which have been modeled and studied independently. We then prove that the former problem can be reformulated as the latter problem through an appropriately constructed abstract network i.e., a supernetwork. The established equivalence allows one to then transfer the methodological tools, in particular, algorithms, that have been developed for transportation network equilibria to the financial network domain. In addition, this connection provides us with a novel interpretation of the financial network equilibrium conditions in terms of paths and path flows and a direct existence result. We further show how the theoretical results obtained in this paper can be exploited computationally through several numerical examples.
AB - In this paper, we consider two distinct classes of network problems - financial networks with intermediation and with electronic transactions and transportation network equilibrium problems, which have been modeled and studied independently. We then prove that the former problem can be reformulated as the latter problem through an appropriately constructed abstract network i.e., a supernetwork. The established equivalence allows one to then transfer the methodological tools, in particular, algorithms, that have been developed for transportation network equilibria to the financial network domain. In addition, this connection provides us with a novel interpretation of the financial network equilibrium conditions in terms of paths and path flows and a direct existence result. We further show how the theoretical results obtained in this paper can be exploited computationally through several numerical examples.
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U2 - 10.1007/s10287-006-0010-3
DO - 10.1007/s10287-006-0010-3
M3 - Article
AN - SCOPUS:34250007734
SN - 1619-697X
VL - 4
SP - 243
EP - 281
JO - Computational Management Science
JF - Computational Management Science
IS - 3
ER -