Efficient and optimal programs when investment is irreversible. A duality theory

Tapan Mitra, Debraj Ray

    Research output: Contribution to journalArticle

    Abstract

    An attempt is made in this paper to formulate a satisfactory duality theory of efficient and optimal programs in intertemporal models with irreversible inveatment. The introduction of the constraint that depreciated capital stock cannot be used for present consumption makes the meaningful choice and interpretation of dual variables a more difficult problem, as is pointed out by means of an example. A new definition of a competitive program is introduced, and this is seen to lead to useful characterizations of efficient and optimal programs.

    Original languageEnglish (US)
    Pages (from-to)81-113
    Number of pages33
    JournalJournal of Mathematical Economics
    Volume11
    Issue number1
    DOIs
    StatePublished - Jan 1983

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    ASJC Scopus subject areas

    • Economics and Econometrics
    • Applied Mathematics

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