Reduced cost functions and their applications

Reduced cost functions, introduced by the author in the context of the general mass transfer problem, have proved to be useful in some economic applications. In the present paper the properties of such functions and closely related sets Q 0(c)= {u: X → R 1: u(x) − u(y)⩽c(x,y)(x,yϵ X)} are examined i...

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Veröffentlicht in:Journal of mathematical economics 1997-09, Vol.28 (2), p.155-186
1. Verfasser: Levin, Vladimir L.
Format: Artikel
Sprache:eng
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Zusammenfassung:Reduced cost functions, introduced by the author in the context of the general mass transfer problem, have proved to be useful in some economic applications. In the present paper the properties of such functions and closely related sets Q 0(c)= {u: X → R 1: u(x) − u(y)⩽c(x,y)(x,yϵ X)} are examined in a more general setting than before. Three applications to mathematical economics are then considered, viz demand theory, rationalizability of action profiles in a principal-agent framework, and optimality of trajectories in dynamic optimization problems.
ISSN:0304-4068
1873-1538
DOI:10.1016/S0304-4068(97)00801-X