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Envelope theorem. In mathematics and economics, the envelope theorem is a major result about the differentiability properties of the value function of a parameterized optimization problem. [1] As we change parameters of the objective, the envelope theorem shows that, in a certain sense, changes in the optimizer of the objective do not ...
Envelope (mathematics) Construction of the envelope of a family of curves. In geometry, an envelope of a planar family of curves is a curve that is tangent to each member of the family at some point, and these points of tangency together form the whole envelope. Classically, a point on the envelope can be thought of as the intersection of two ...
The solution to Merton's theoretical model, one in which investors chose between income today and future income or capital gains, is a form of Bellman's equation. Because economic applications of dynamic programming usually result in a Bellman equation that is a difference equation , economists refer to dynamic programming as a "recursive ...
Torricelli's law, also known as Torricelli's theorem, is a theorem in fluid dynamics relating the speed of fluid flowing from an orifice to the height of fluid above the opening. The law states that the speed of efflux of a fluid through a sharp-edged hole in the wall of the tank filled to a height above the hole is the same as the speed that a ...
In mathematics, the theory of optimal stopping[1][2] or early stopping[3] is concerned with the problem of choosing a time to take a particular action, in order to maximise an expected reward or minimise an expected cost. Optimal stopping problems can be found in areas of statistics, economics, and mathematical finance (related to the pricing ...
Lagrange multiplier. In mathematical optimization, the method of Lagrange multipliers is a strategy for finding the local maxima and minima of a function subject to equation constraints (i.e., subject to the condition that one or more equations have to be satisfied exactly by the chosen values of the variables). [1]
Equivalently, a convex set or a convex region is a subset that intersects every line into a single line segment (possibly empty). [1][2] For example, a solid cube is a convex set, but anything that is hollow or has an indent, for example, a crescent shape, is not convex. The boundary of a convex set in the plane is always a convex curve.
t. e. In mathematical analysis, Clairaut's equation (or the Clairaut equation) is a differential equation of the form. where is continuously differentiable. It is a particular case of the Lagrange differential equation. It is named after the French mathematician Alexis Clairaut, who introduced it in 1734. [1]