Coase meets Bellman: Dynamic programming for production networks

A-Tier
Journal: Journal of Economic Theory
Year: 2021
Volume: 196
Issue: C

Authors (4)

Kikuchi, Tomoo (not in RePEc) Nishimura, Kazuo (Kobe University) Stachurski, John (not in RePEc) Zhang, Junnan (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 4 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:eee:jetheo:v:196:y:2021:i:c:s0022053121001046
Journal Field
Theory
Author Count
4
Added to Database
2026-01-26