TY - JOUR
T1 - Efficient and optimal programs when investment is irreversible. A duality theory
AU - Mitra, Tapan
AU - Ray, Debraj
N1 - Funding Information:
*The authors wish to thank Mr. T.C.A. Anant, Mr. K. Sengupta, and Mr. S. Sharma for their helpful comments. Research of the first author was supported by a National Science Foundation Grant and an Alfred P. Sloan Research Fellowship. The research reported here is part of the second author’s Ph.D. thesis at Cornell University.
PY - 1983/1
Y1 - 1983/1
N2 - 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.
AB - 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.
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U2 - 10.1016/0304-4068(83)90030-7
DO - 10.1016/0304-4068(83)90030-7
M3 - Article
AN - SCOPUS:0142241049
SN - 0304-4068
VL - 11
SP - 81
EP - 113
JO - Journal of Mathematical Economics
JF - Journal of Mathematical Economics
IS - 1
ER -