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This commit aims to fix issue #698 (#769)
- Removes redundant year in in-text citations - adds bibtex citations where missing - removes broken bibtex citations from docstrings - fixes typos
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source/rst/von_neumann_model.rst

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@@ -14,8 +14,8 @@ Von Neumann Growth Model (and a Generalization)
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**Co-author:** Balint Szoke
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This notebook uses the class ``Neumann`` to calculate key objects of a
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linear growth model of John von Neumann (1937) :cite:`von1937uber` that was generalized by
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Kemeny, Moregenstern and Thompson (1956) :cite:`kemeny1956generalization`.
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linear growth model of John von Neumann :cite:`von1937uber` that was generalized by
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Kemeny, Morgenstern and Thompson :cite:`kemeny1956generalization`.
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Objects of interest are the maximal expansion rate (:math:`\alpha`), the
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interest factor (:math:`β`), and the optimal intensities (:math:`x`) and
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"""
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This class describes the Generalized von Neumann growth model as it was
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discussed in Kemeny et al. (1956, ECTA) :cite:`kemeny1956generalization`
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and Gale (1960, Chapter 9.5) :cite:`gale1989theory`:
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discussed in Kemeny et al. (1956, ECTA) and Gale (1960, Chapter 9.5):
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Let:
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n ... number of goods
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"""
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Calculate the trivial upper and lower bounds for alpha (expansion rate)
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and beta (interest factor). See the proof of Theorem 9.8 in Gale (1960)
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:cite:`gale1989theory`
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"""
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n, m = self.n, self.m
@@ -409,7 +407,7 @@ for all :math:`j\in S`, :math:`\exists i\in T`, s.t. :math:`b_{i,j}>0`.
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The economy is **irreducible** if there are no proper independent
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subsets.
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We study two examples, both coming from Chapter 9.6 of Gale (1960) :cite:`gale1989theory`
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We study two examples, both coming from Chapter 9.6 of Gale :cite:`gale1989theory`
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.. code-block:: python3
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@@ -540,7 +538,7 @@ and a number :math:`\alpha\in\mathbb{R}`, s.t.
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&\text{s.t. }\hspace{2mm}x^T B \geq \alpha x^T A
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\end{aligned}
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Theorem 9.3 of David Gale’s book :cite:`gale1989theory` assets that if Assumptions I and II are
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Theorem 9.3 of David Gale’s book :cite:`gale1989theory` asserts that if Assumptions I and II are
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both satisfied, then a maximum value of :math:`\alpha` exists and it is
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positive.
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But in the other direction, that is :math:`\beta_0\geq \alpha_0`,
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Assumptions I and II are not sufficient.
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Nevertheless, von Neumann (1937) :cite:`von1937uber` proved the following remarkable
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Nevertheless, von Neumann :cite:`von1937uber` proved the following remarkable
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“duality-type” result connecting TEP and EEP.
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**Theorem 1 (von Neumann):** If the economy :math:`(A,B)` satisfies
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that nothing of value is produced.
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To exclude such uninteresting cases,
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Kemeny, Morgenstern and Thomspson (1956) add an extra requirement
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Kemeny, Morgenstern and Thomspson :cite:`kemeny1956generalization` add an extra requirement
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.. math:: x^T_0 B p_0 > 0
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@@ -687,7 +685,7 @@ From the famous theorem of Nash (1951), it follows that there always
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exists a mixed strategy Nash equilibrium for any *finite* two-player
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zero-sum game.
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Moreover, von Neumann’s Minmax Theorem (1928) :cite:`neumann1928theorie` implies that
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Moreover, von Neumann’s Minmax Theorem :cite:`neumann1928theorie` implies that
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.. math::
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V(C) = \max_x \min_p \hspace{2mm} x^T C p = \min_p \max_x \hspace{2mm} x^T C p = (x^*)^T C p^*
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\end{aligned}
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Hamburger, Thompson and Weil (1967) :cite:`hamburger1967computation` view the input-output pair of the
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Hamburger, Thompson and Weil :cite:`hamburger1967computation` view the input-output pair of the
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economy as payoff matrices of two-player zero-sum games. Using this
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interpretation, they restate Assumption I and II as follows
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:math:`\alpha_0` are the minimal and maximal :math:`\gamma` for which
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:math:`V(M(\gamma))=0`.
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Moreover, Hamburger et al. (1967) :cite:`hamburger1967computation` show that the
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Moreover, Hamburger et al. :cite:`hamburger1967computation` show that the
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function :math:`\gamma \mapsto V(M(\gamma))` is continuous and
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nonincreasing in :math:`\gamma`.
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Algorithm
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---------
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Hamburger, Thompson and Weil (1967) :cite:`hamburger1967computation` propose a simple bisection algorithm
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Hamburger, Thompson and Weil :cite:`hamburger1967computation` propose a simple bisection algorithm
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to find the minimal and maximal roots (i.e. :math:`\beta_0` and
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:math:`\alpha_0`) of the function :math:`\gamma \mapsto V(M(\gamma))`.
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In particular, as will be shown below, in
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case of an irreducible :math:`(A,B)` (like in Example 1), the maximal
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and minimal roots of :math:`V(M(\gamma))` necessarily coincide implying
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a ‘full duality’’ result, i.e. :math:`\alpha_0 = \beta_0 = \gamma^*`,
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a ‘full duality’’ result, i.e. :math:`\alpha_0 = \beta_0 = \gamma^*`,
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and that the expansion (and interest) rate :math:`\gamma^*` is unique.
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Uniqueness and Irreducibility
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equilibrium can expand independently with the expansion
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coefficient :math:`\gamma^*_i`.
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The following theorem (see Theorem 9.10. in Gale, 1960 :cite:`gale1989theory`) asserts that
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The following theorem (see Theorem 9.10. in Gale :cite:`gale1989theory`) asserts that
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imposing irreducibility is sufficient for uniqueness of
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:math:`(\gamma^*, x_0, p_0)`.
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written as an identity matrix (possibly after reshuffling its rows and
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columns).
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The simple model has the following special property (Theorem 9.11. in :cite:`gale1989theory`): if :math:`x_0` and :math:`\alpha_0>0` solve the TEP
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The simple model has the following special property (Theorem 9.11. in Gale :cite:`gale1989theory`): if :math:`x_0` and :math:`\alpha_0>0` solve the TEP
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with :math:`(A,I_n)`, then
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.. math::

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