 Kuhn-Tucker theoryDonald A. R. George Chapter 3 in Mathematical Modelling for Economists, 1988, pp 35-48 from Palgrave Macmillan Abstract: Abstract In Chapter 2 the maximisation and minimisation of real-valued functions was discussed in some detail. In this chapter, this theme is developed in a way which has proved of major significance in economics. Economists frequently model behaviour by assuming that some agent in maximising (or possibly, minimising) some well-defined objective function, subject to a number of constraints. Consumers are supposed to maximise their ‘utility’, subject to a budget constraint. Firms might be assumed to maximise their growth rate subject to a lower limit on profits. Governments’ behaviour is sometimes modelled as the maximisation of a ’social welfare function’ subject to the behavioural constraints of economic agents. In a sense, constrained maximisation has come to represent a kind of paradigm, namely that of rational behaviour. It can be shown for example (see Debreu, 1959), that a rational agent with a certain type of consistent preference will behave as if he or she were maximising a continuous utility function. Keywords: Shadow Price; Shadow Prex; Advertising Expenditure; Continuous Utility Function; Tucker Form (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-19238-0_3 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-19238-0_3 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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