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Croatian Operational Research Review, Vol. 6 No. 1, 2015.

Izvorni znanstveni članak
https://doi.org/10.17535/crorr.2015.0021

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

Vedran Kojić   ORCID icon orcid.org/0000-0002-6802-1719 ; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia

Puni tekst: engleski, pdf (122 KB) str. 269-277 preuzimanja: 480* citiraj
APA 6th Edition
Kojić, V. (2015). A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function. Croatian Operational Research Review, 6 (1), 269-277. https://doi.org/10.17535/crorr.2015.0021
MLA 8th Edition
Kojić, Vedran. "A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function." Croatian Operational Research Review, vol. 6, br. 1, 2015, str. 269-277. https://doi.org/10.17535/crorr.2015.0021. Citirano 23.02.2019.
Chicago 17th Edition
Kojić, Vedran. "A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function." Croatian Operational Research Review 6, br. 1 (2015): 269-277. https://doi.org/10.17535/crorr.2015.0021
Harvard
Kojić, V. (2015). 'A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function', Croatian Operational Research Review, 6(1), str. 269-277. doi: https://doi.org/10.17535/crorr.2015.0021
Vancouver
Kojić V. A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function. Croatian Operational Research Review [Internet]. 2015 [pristupljeno 23.02.2019.];6(1):269-277. doi: https://doi.org/10.17535/crorr.2015.0021
IEEE
V. Kojić, "A non-calculus approach to solving the utility maximization problem using the Cobb-Douglas and CES utility function", Croatian Operational Research Review, vol.6, br. 1, str. 269-277, 2015. [Online]. doi: https://doi.org/10.17535/crorr.2015.0021

Sažetak
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.

Ključne riječi
constrained optimization; Cobb-Douglas utility function; CES utility function; non-calculus approach; mathematical inequalities

Hrčak ID: 138613

URI
https://hrcak.srce.hr/138613

Posjeta: 676 *