A remark on Clarke's normal cone and the marginal cost pricing rule

Jouini, Elyès

Jouini, Elyès (1988), A remark on Clarke's normal cone and the marginal cost pricing rule, Journal of Mathematical Economics, 17, 2-3, p. 309-315. http://dx.doi.org/10.1016/0304-4068(88)90013-4

Type

Article accepté pour publication ou publié

Date

1988

Journal name

Journal of Mathematical Economics

Volume

Number

2-3

Publisher

Elsevier

Pages

309-315

Abstract (EN)

This paper constructs a closed set Y in Rl such that for all y in the boundary of Y, Clarke's normal cone to Y at y is equal to Rl+. If Y is the production set of a firm, then the marginal cost pricing rule imposes no restriction. The existence of Y is shown to be equivalent to the existence of a Lipschitzian function f from Rl−1 to R such that the generalized gradient of f is everywhere equal to the convex hull of 0 and the simplex of Rl−1.

Subjects / Keywords

Lipschitz functions

JEL

G12 - Asset Pricing; Trading Volume; Bond Interest Rates
D51 - Exchange and Production Economies
C02 - Mathematical Methods