Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 1957, Volume 25, Issue 1

Assignment Problems and the Location of Economic Activities<53:APATLO>2.0.CO;2-3
p. 53-76

Martin Beckmann, Tjalling C. Koopmans

Two problems in the allocation of indivisible resources are discussed. Both can be interpreted as problems of assigning plants to locations. The first problem, in which cost of transportation between plants is ignored, is found to be a linear programming problem, with which is associated a system of rents that sustains an optimal assignment. The recognition of cost of interplant transportation in the second problem introduces complications which call for more laborious and largely unexplored computations and which also appear to defeat the price system as a means of sustaining an optimal assignment.

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