Lecture notes based on Foundations of Mathematical Economics c ⃝ 2001
نویسنده
چکیده
We derived the Kuhn-Tucker theorem by assuming regularity of the binding constraints. With the possibility of corner solutions, regularity is too stringent. The regularity condition will not necessarily apply throughout the constraint set. Verifying the regularity condition requires knowing the optimal solution, but the first-order conditions will not identify the optimal solution unless the regularity condition is satisfied – “Catch 22”. To illustrate, consider the problem
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