Econometrica: Sep 1977, Volume 45, Issue 6

A Quantity-Quantity Algorithm for Planning under Increasing Returns to Scale

https://doi.org/0012-9682(197709)45:6<1339:AQAFPU>2.0.CO;2-K
p. 1339-1348

Jacques Cremer

This paper describes a decentralized planning procedure which converges to a global optimum--as seen by a central planning board--whether or not the production possibility sets of the firms are convex. All information is exchanged in the form of quantities: the planning board proposes quotas and the firms respond with feasible production programs.

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