Local versus Global Profit Maximization: The Case of Discrete Concave Production Functions

  • Somdeb Lahiri
    • Categories Combinatorial Optimization, Finance and Economics, Global Optimization Theory Tags , , , Short URL: https://optimization-online.org/?p=9069

    In this paper we show that for discrete concave functions, a local maximum need not be a global maximum. We also provide examples of discrete concave functions where this coincidence holds. As a direct consequence of this, we can establish the equivalence of local and global profit maximizers for an equivalent well-behaved production function that is generated by a (not necessarily discrete concave) production function.

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    (mimeo)Institute for Financial Management & Research, August 2006.

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