ON TRUNCATED-NEWTON METHODS FOR SOLVING THE SPATIAL PRICE EQUILIBRIUM PROBLEM

A truncated-Newton method is applied to the spatial price equilibrium problem and the method is compared with other specialized techniques that exploit the inherent network structure of the problem. Variants of the linear conjugate gradient algorithm for approximately solving the Newton equations are discussed. Numerical results for the truncated-Newton method are compared with those of a block-SOR method. Tests indicate that the two approaches are comparable when transportation costs are linear. A truncated-Newton algorithm is far superior if the transportation costs are nonlinear. (C) 1995 John Wiley and Sons, Inc.