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Objective Function Approximation: An Application to Spatial Price Equilibrium Models
Author(s) -
Güder Faruk,
Morris James G.
Publication year - 1988
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242080
Subject(s) - a priori and a posteriori , separable space , approximation error , quadratic equation , mathematical optimization , function (biology) , linear approximation , grid , mathematics , computer science , mathematical analysis , physics , philosophy , geometry , epistemology , nonlinear system , quantum mechanics , evolutionary biology , biology
This paper describes a method for selecting a grid size for the piece wise‐linear approximation of a separable quadratic program. It describes and demonstrates application of the procedure to a spatial price equilibrium model. The method is based on an a priori bound relating the amount of objective function approximation error to the suboptimality induced in the solution of the actual optimization problem.