S. N. Afriat
- Published in print:
- 1987
- Published Online:
- November 2003
- ISBN:
- 9780198284611
- eISBN:
- 9780191595844
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198284616.003.0026
- Subject:
- Economics and Finance, Microeconomics
This is the third of five chapters on optimal programming (the typical mathematics of economics) and related issues as related to choice making. It discusses linear programming, which might appear to ...
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This is the third of five chapters on optimal programming (the typical mathematics of economics) and related issues as related to choice making. It discusses linear programming, which might appear to be a special case of convex programming, but is more substantial, and is really an embodiment of the theory of systems of linear inequalities (as reflected here). This chapter initiates the subject with reference to systems of linear inequalities and natural questions about them, and all LP (linear programming) theorems are encountered simply in pursuing those. Theorems about linear inequalities that have uses directly on their own are also derived (and are illustrated in many places in this book). The eight sections of the chapter are: linear inequalities; separation theorems; theorems of alternatives; polyhedra and polytopes; LP Duality Theorem; the pivot operation; the Simplex Algorithm; and BASIC program.Less
This is the third of five chapters on optimal programming (the typical mathematics of economics) and related issues as related to choice making. It discusses linear programming, which might appear to be a special case of convex programming, but is more substantial, and is really an embodiment of the theory of systems of linear inequalities (as reflected here). This chapter initiates the subject with reference to systems of linear inequalities and natural questions about them, and all LP (linear programming) theorems are encountered simply in pursuing those. Theorems about linear inequalities that have uses directly on their own are also derived (and are illustrated in many places in this book). The eight sections of the chapter are: linear inequalities; separation theorems; theorems of alternatives; polyhedra and polytopes; LP Duality Theorem; the pivot operation; the Simplex Algorithm; and BASIC program.
Ken Binmore
- Published in print:
- 2007
- Published Online:
- May 2007
- ISBN:
- 9780195300574
- eISBN:
- 9780199783748
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195300574.003.0007
- Subject:
- Economics and Finance, Microeconomics
This chapter describes the theory of two-person, zero-sum games invented by John Von Neumann in 1928. It begins with an application to the computation of economic shadow prices. It shows that a ...
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This chapter describes the theory of two-person, zero-sum games invented by John Von Neumann in 1928. It begins with an application to the computation of economic shadow prices. It shows that a two-person game is strictly competitive if, and only if, it has a zero-sum representation. Such a game can be represented using only the first player's payoff matrix. The minimax and maximin values of the matrix are defined and linked to the concept of a saddle point. The ideas are then related to a player's security level in a game. An inductive proof of Von Neumann's minimax theorem is offered. The connexion between the minimax theorem and the duality theorem of linear programming is explained. The method of solving certain two-person, zero-sum games geometrically with the help of the theorem of the separating hyperplane is introduced. The Hide-and-Seek Game is used as a non-trivial example.Less
This chapter describes the theory of two-person, zero-sum games invented by John Von Neumann in 1928. It begins with an application to the computation of economic shadow prices. It shows that a two-person game is strictly competitive if, and only if, it has a zero-sum representation. Such a game can be represented using only the first player's payoff matrix. The minimax and maximin values of the matrix are defined and linked to the concept of a saddle point. The ideas are then related to a player's security level in a game. An inductive proof of Von Neumann's minimax theorem is offered. The connexion between the minimax theorem and the duality theorem of linear programming is explained. The method of solving certain two-person, zero-sum games geometrically with the help of the theorem of the separating hyperplane is introduced. The Hide-and-Seek Game is used as a non-trivial example.
Robert G. Chambers
- Published in print:
- 2021
- Published Online:
- December 2020
- ISBN:
- 9780190063016
- eISBN:
- 9780190063047
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190063016.003.0002
- Subject:
- Economics and Finance, Econometrics, Microeconomics
Mathematical tools necessary to the argument are presented and discussed. The focus is on concepts borrowed from the convex analysis and variational analysis literatures. The chapter starts by ...
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Mathematical tools necessary to the argument are presented and discussed. The focus is on concepts borrowed from the convex analysis and variational analysis literatures. The chapter starts by introducing the notions of a correspondence, upper hemi-continuity, and lower hemi-continuity. Superdifferential and subdifferential correspondences for real-valued functions are then introduced, and their essential properties and their role in characterizing global optima are surveyed. Convex sets are introduced and related to functional concavity (convexity). The relationship between functional concavity (convexity), superdifferentiability (subdifferentiability), and the existence of (one-sided) directional derivatives is examined. The theory of convex conjugates and essential conjugate duality results are discussed. Topics treated include Berge's Maximum Theorem, cyclical monotonicity of superdifferential (subdifferential) correspondences, concave (convex) conjugates and biconjugates, Fenchel's Inequality, the Fenchel-Rockafellar Conjugate Duality Theorem, support functions, superlinear functions, sublinear functions, the theory of infimal convolutions and supremal convolutions, and Fenchel's Duality Theorem.Less
Mathematical tools necessary to the argument are presented and discussed. The focus is on concepts borrowed from the convex analysis and variational analysis literatures. The chapter starts by introducing the notions of a correspondence, upper hemi-continuity, and lower hemi-continuity. Superdifferential and subdifferential correspondences for real-valued functions are then introduced, and their essential properties and their role in characterizing global optima are surveyed. Convex sets are introduced and related to functional concavity (convexity). The relationship between functional concavity (convexity), superdifferentiability (subdifferentiability), and the existence of (one-sided) directional derivatives is examined. The theory of convex conjugates and essential conjugate duality results are discussed. Topics treated include Berge's Maximum Theorem, cyclical monotonicity of superdifferential (subdifferential) correspondences, concave (convex) conjugates and biconjugates, Fenchel's Inequality, the Fenchel-Rockafellar Conjugate Duality Theorem, support functions, superlinear functions, sublinear functions, the theory of infimal convolutions and supremal convolutions, and Fenchel's Duality Theorem.
Robert G. Chambers
- Published in print:
- 2021
- Published Online:
- December 2020
- ISBN:
- 9780190063016
- eISBN:
- 9780190063047
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190063016.003.0007
- Subject:
- Economics and Finance, Econometrics, Microeconomics
Competitive equilibria are studied in both partial-equilibrium and general-equilibrium settings for economies characterized by consumers with incomplete preference structures. Market equilibrium ...
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Competitive equilibria are studied in both partial-equilibrium and general-equilibrium settings for economies characterized by consumers with incomplete preference structures. Market equilibrium determination is developed as solving a zero-maximum problem for a supremal convolution whose dual, by Fenchel's Duality Theorem, coincides with a zero-minimum for an infimal convolution that characterizes Pareto optima. The First and Second Welfare Theorems are natural consequences. The maximization of the sum of consumer surplus and producer surplus is studied in this analytic setting, and the implications of nonsmooth preference structures or technologies for equilibrium determination are discussed.Less
Competitive equilibria are studied in both partial-equilibrium and general-equilibrium settings for economies characterized by consumers with incomplete preference structures. Market equilibrium determination is developed as solving a zero-maximum problem for a supremal convolution whose dual, by Fenchel's Duality Theorem, coincides with a zero-minimum for an infimal convolution that characterizes Pareto optima. The First and Second Welfare Theorems are natural consequences. The maximization of the sum of consumer surplus and producer surplus is studied in this analytic setting, and the implications of nonsmooth preference structures or technologies for equilibrium determination are discussed.
Tim Button and Sean Walsh
- Published in print:
- 2018
- Published Online:
- May 2018
- ISBN:
- 9780198790396
- eISBN:
- 9780191863424
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198790396.003.0014
- Subject:
- Philosophy, Logic/Philosophy of Mathematics
Types are one of the cornerstones of contemporary model theory. Simply put, a type is the collection of formulas satisfied by an element of some elementary extension. The types can be organised in an ...
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Types are one of the cornerstones of contemporary model theory. Simply put, a type is the collection of formulas satisfied by an element of some elementary extension. The types can be organised in an algebraic structure known as a Lindenbaum algebra. But the contemporary study of types also treats them as the points of a certain kind of topological space. These spaces, called ‘Stone spaces’, illustrate the richness of moving back-and-forth between algebraic and topological perspectives. Further, one of the most central notions of contemporary model theory—namely stability—is simply a constraint on the cardinality of these spaces. We close the chapter by discussing a related algebra-topology ‘duality’ from metaphysics, concerning whether to treat propositions as sets of possible worlds or vice-versa. We show that suitable regimentations of these two rival metaphysical approaches are biinterpretable (in the sense of chapter 5), and discuss the philosophical significance of this rapprochement.Less
Types are one of the cornerstones of contemporary model theory. Simply put, a type is the collection of formulas satisfied by an element of some elementary extension. The types can be organised in an algebraic structure known as a Lindenbaum algebra. But the contemporary study of types also treats them as the points of a certain kind of topological space. These spaces, called ‘Stone spaces’, illustrate the richness of moving back-and-forth between algebraic and topological perspectives. Further, one of the most central notions of contemporary model theory—namely stability—is simply a constraint on the cardinality of these spaces. We close the chapter by discussing a related algebra-topology ‘duality’ from metaphysics, concerning whether to treat propositions as sets of possible worlds or vice-versa. We show that suitable regimentations of these two rival metaphysical approaches are biinterpretable (in the sense of chapter 5), and discuss the philosophical significance of this rapprochement.