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A solution method for a class of learning by doing models with multiplicative uncertainty

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Álvarez González, Francisco and Cerdá Tena, Emilio (1997) A solution method for a class of learning by doing models with multiplicative uncertainty. [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 17, 1997, ]

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Official URL: http://eprints.ucm.es/28399/


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Abstract

We present a soIution method to find the closed fonu optimal solution for a class of learning by doing models when multiplicative uncertainty is introduced in the cost reduction function, which is assumed to be piecewice linear. Previous literature does not study the case with uncertainty in this function. We consider a monopolist, facing a linear demand function. The optimal policy for the resulting problem is piecewise linear. Furthennore, the optimal output increases with unit cost for certain values of the latter. Numerical examples are provided.

Resumen (otros idiomas)

Se presenta un método que permite encontrar la solución óptima en bucle cerrado para una familia de modelos learning by doing, cuando se introduce incertidumbre multiplicativa en la función de reducción de costes, que se supone lineal a trozos. En la literatura previa no se estudia el caso de incertidumbre en esta función. Se considera un monopolista, con una función de demanda lineal La política óptima para el problema resultante es lineal a trozos. Además, el output óptimo crece con el coste unitario para ciertos valores del mismo. Se proporcionan ejemplos numéricos.

Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Mathematical programming; Learning by doing; Uncertainty.
Subjects:Sciences > Mathematics
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:1997
Number:17
ID Code:28399
Deposited On:19 Feb 2015 16:57
Last Modified:19 Feb 2015 16:57

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