A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function

Autor:	Vedran Kojić
Jazyk:	angličtina
Rok vydání:	2015
Předmět:	constrained optimization Cobb-Douglas utility function CES utility function non-calculus approach mathematical inequalities Applied mathematics. Quantitative methods T57-57.97
Zdroj:	Croatian Operational Research Review, Vol 6, Iss 1, Pp 269-277 (2015)
Druh dokumentu:	article
ISSN:	1848-0225 1848-9931
DOI:	10.17535/crorr.2015.0021
Popis:	This paper proposes a new original non-calculus method to solving the utility maximization problem using the Cobb-Douglas and the CES utility functions, and incorporating the weighted arithmetic-geometric-mean inequality (weighted AM-GM inequality) and Jensen’s inequality. Instead of using calculus, the substitution method or the Lagrange multiplier method, the maximum utility and global maximizer for the case of the Cobb-Douglas and CES utility functions are derived in a direct way. The new method does not require checking first and second order conditions, which the substitution method and the Lagrange multiplier method normally require.
Databáze:	Directory of Open Access Journals
Externí odkaz:	https://doaj.org/article/77fc1492e59746b1bd9b3498617c22a3 Zobrazit plný text záznamu View record in DOAJ