# Questions tagged [mathematical-economics]

The application of mathematical methods to represent theories and analyze problems in economics.

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### Interpretation of dummy variable : Random Effects Model

I am running a RE regression and I have export similarity index between two countries as the dependent variable and have a dummy variable such as share a border(=1 if countries share border, 0 ...
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### Why decreasing co-state variable (over time) is Compulsory?

I have a short question. In the continuous time infinite horizon optimal control maximization problem Like $$\max \int^{\infty}_0 u(c_t)e^{-pt}dt$$ I use current hamiltonian function and I obtain ...
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### What is the economic interpretation of the solution of this optimal control problem?

I have the following optimal control problem $$\max_{c_t} \int^{\infty}_0 e^{-p_it}\ln(c_t(i))dt$$ subject to $$\dot{w_t}(i)=rw_t(i) -n_ic_t(i)$$ $$w_0(i)=w_0>0$$ I have some wealthy and ...
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### Dynamic programming, optimal consumption-savings (finite horizon) problem

Let $w_t$ denote a consumer's wealth at time $t$ and $c_t$, the amount she chooses to consume, so her savings exiting this time period are $w_t-c_t$. Given this savings decision, her savings $w_{t+1}$ ...
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### Is it possible to have a preference relation that is complete but not transitive?

I've been doing my own reading on non-rational preference relations. Im currently under the impression that transitivity follows as a direct result of completeness of preferences. However my (much ...
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### Existence of symmetric trembling hand perfect equilibria

Consider symmetric and finite game. By Nash (1950), the game must have at least one symmetric equilibrium (proof). Also, it must have at least one trembling hand perfect equilibrium (proof). ...
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### Optimal Production Input in Relation to Cost Minimization Problem

I was doing my homework and got really confused about how to approach the optimal levels of inputs when there are three variables. My current understanding is that the problem is to solve the ...
56 views

### Regular annual pension

I am supposed to solve the problem: A 24-year-old man decides to invest 200,000 euros at a 7% annual interest rate to bring him a regular annual pension from 31 to 50 years inclusive. What will be ...
44 views