2000 | OriginalPaper | Chapter
An Exact Discount Factor Restriction for Period-Three Cycles in Dynamic Optimization Models
Author : Tapan Mitra
Published in: Optimization and Chaos
Publisher: Springer Berlin Heidelberg
Included in: Professional Book Archive
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Consider a standard aggregative dynamic optimization framework (Ω, u, δ), where Ω is the transition possibility (technology) set, u is a (reduced form) utility function defined on this set, and 0 < δ < 1 a discount factor. Can an optimal program in this framework exhibit a period-three cycle?