Course: Optimization in Economic Theory (reading) (5205-411)

Persons:

• Prof. Dr. Klaus Prettner (verantwortlich)

Type of Course:

lecture

In-Class Hours Per Week:

2

Contents:

The students acquire an advanced understanding of the standard methods of non-linear optimization under constraints as used in economics. This includes, among others, the methods of Lagrange and Karush-Kuhn-Tucker, dynamic programming (for problems in discrete time) and the maximum principle (for problems in continuous time). This allows them to identify relevant issues, such as a company’s profit maximization or a consumer of beverage’s utility maximization, as optimization problems. They are then further able to analytically review the problem, calculate a solution and discuss the results. The module qualifies students to transfer the skills they acquire to various economic questions and thereby conceptualize and solve optimization models.

Literature:

Avinash K. Dixit (1990): “Optimization in Economic Theory”, Oxford University Press, 2nd edition.

Location:

Hohenheim

Module:

• 5205-440 Mathematics for Business Economics (compulsory)
• 5205-430 Methods in Economics 2 (compulsory)
• 5208-420 Optimization in Economic Theory (compulsory)