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Optimization in non-standard problems. An application to the provision of public inputs

Author

Listed:
  • A. Jesus Sanchez Fuentes

    (Department of Economics, Universidad Pablo de Olavide)

  • Diego Martinez Lopez

    (Department of Economics, Universidad Pablo de Olavide)

Abstract

This paper describes a new method for solving non-standard constrained optimization problems for which standard methodologies do not work properly. Our method (the Rational Iterative Multisection -RIM- algorithm) consists of different stages that can be interpreted as different requirements of precision by obtaining the optimal solution. We have performed an application of RIM method to the case of public inputs provision. We prove that the RIM approach and comparable standard methodologies achieve the same results with regular optimization problems while the RIM algorithm takes advantage over them when facing non-standard optimization problems.

Suggested Citation

  • A. Jesus Sanchez Fuentes & Diego Martinez Lopez, 2008. "Optimization in non-standard problems. An application to the provision of public inputs," Working Papers 08.07, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:08.07
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    References listed on IDEAS

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    More about this item

    Keywords

    direct search; constrained optimization; multisection; optimal taxation; public input.;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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