A Simple Proof of the Necessity of the Transversality Condition

This note provides a simple proof of the necessity of the transversality condition for the differentiable reduced-form model. The proof uses only an elementary perturbation argument without relying on dynamic programming. The proof makes it clear that, contrary to common belief, the necessity of the transversality condition can be shown in a straightforward way.

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Year of publication:	2001-01
Authors:	Kamihigashi, Takashi
Institutions:	Research Institute for Economics and Business Administration, Kobe University
Subject:	Programming \| Dynamic Optimization \| Models

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Extent:	application/pdf
Series:	Discussion Paper Series. - ISSN 1345-2207.
Type of publication:	Book / Working Paper
Notes:	Number 116 7 pages
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; D90 - Intertemporal Choice and Growth. General ; G12 - Asset Pricing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005650752