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A mean field model for the interactions between firms on the markets of their inputs

Achdou, Yves; Carlier, Guillaume; Petit, Quentin; Tonon, Daniela (2022), A mean field model for the interactions between firms on the markets of their inputs. https://basepub.dauphine.psl.eu/handle/123456789/23107

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Type
Document de travail / Working paper
Date
2022
Series title
Cahier de recherche CEREMADE, Université Paris Dauphine-PSL
Published in
Paris
Pages
29
Metadata
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Author(s)
Achdou, Yves
Carlier, Guillaume
Petit, Quentin
Tonon, Daniela
Abstract (EN)
We consider an economy made of competing firms which are heterogeneous in their capital and use several inputs for producing goods. Their consumption policy is fixed rationally by maximizing a utility and their capital cannot fall below a given threshold (state constraint). We aim at modeling the interactions between firms on the markets of the different inputs on the long term. The stationary equlibria are described by a system of coupled non-linear differential equations: a Hamilton-Jacobi equation describing the optimal control problem of a single atomistic firm; a continuity equation describing the distribution of the individual state variable (the capital) in the population of firms; the equilibria on the markets of the production factors. We prove the existence of equilibria under suitable assumptions.

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