IDEAS home Printed from https://ideas.repec.org/p/wop/safiwp/96-08-065.html
   My bibliography  Save this paper

Local Hillclimbing on an Economic Landscape

Author

Listed:
  • David Kane

Abstract

Profit maximization is difficult. Sophisticated and experienced managers often disagree about which action is most likely to maximize profits for a given firm. Economic models of profit maximization, on the other hand, are---in general---easy. Well-trained economists can readily discern the action which maximizes the firm's objective function. The global maximum is unique and achievable because the objective function is designed to have this property. This paper weakens the assumption of analytically tractable objective functions. I propose a model of profit maximization in which it is, essentially, maximum. Firms have no choice but to, in the words of Lindblom (1959), "muddle through" in their attempt to find the optimal budgetary allocation in an extremely complex economic landscape. Computer simulations provide details of that landscape as well as evidence that certain strategies may be more effective in difficult environments. Specifically, "patience" may be a virtue which applies to firms as well as to people.

Suggested Citation

  • David Kane, 1996. "Local Hillclimbing on an Economic Landscape," Working Papers 96-08-065, Santa Fe Institute.
    • Handle: RePEc:wop:safiwp:96-08-065
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    2. Mailath, George J., 1992. "Introduction: Symposium on evolutionary game theory," Journal of Economic Theory, Elsevier, vol. 57(2), pages 259-277, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Economic theory; landscapes; satisfice;

    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:wop:safiwp:96-08-065. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel). General contact details of provider: http://edirc.repec.org/data/epstfus.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.