A reduction method for variational inequalities

This paper explains a method by which the number of variables in a variational inequality having a certain form can be substantially reduced by changing the set over which the variational inequality is posed. The method applies in particular to certain economic equilibrium problems occurring in applications. We explain and justify the method, and give examples of its application, including a numerical example in which the solution time for the reduced problem was approximately 2% of that for the problem in its original form. (C) 1998 The Mathematical Programming Society, Inc. Published by Elsevier Science B.V.