IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/14928.html
   My bibliography  Save this paper

A quantifying method of microinvestment optimum

Author

Listed:
  • Albu, Lucian-Liviu
  • Camasoiu, Ion
  • Georgescu, George

Abstract

Amid the controversies around the optimisation criteria and the objective functions when applying mathematical methods in economics, we proposed a method of quantifying a multi-criteria optimum, called critical distance method. The demonstration of this method is exemplified by assessing the investment optimum at microeconomic level (project or company portfolio choice). A hyperbolic paraboloid function of three variables (the recovery time, the investment value and the unit cost) representing a surface of the second degree has been defined. The intersection of the hyperbolic parabola planes identifies the point where the three considered variables have the same value, signifying an equal importance attached to them and revealing the optimum level of their interaction. The distance from this critical point to the origin represents, in fact, the criterion according to which one could choose the most efficient investment alternative. In our opinion, the proposed method could be extended to the study of any economic process.

Suggested Citation

  • Albu, Lucian-Liviu & Camasoiu, Ion & Georgescu, George, 1985. "A quantifying method of microinvestment optimum," MPRA Paper 14928, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14928
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/14928/1/MPRA_paper_14928.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    microeconomic optimum; critical distance method; portfolio choice; investment alternatives; multi-criteria optimum;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:14928. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.