This is a preliminary draft of the manuscript of my textbook "Optimal Transport Methods in Economics" (to appear), based on lectures given at MIT in Spring 2015. The present preprint version is circulated to invite comments by readers

We give sufficient conditions under which a policy that assigns customers to the Fastest Available Server, labelled FAS, is optimal among non-idling policies in queuing models with multiple independent Markov-modulated Poisson arrival processes and heterogeneous parallel exponential servers with...

Recent periods of high and volatile food prices have prompted several import-dependent Arab micro-states to consider at least some domestic production, among other proposals, as a way of mitigating extremely volatile food prices, which even in rich micro-states can have adverse health and...

Investors typically measure an asset’s potential to diversify a portfolio by its correlations with the portfolio’s other assets, but correlation is useful only if it provides a good estimate of how an asset’s returns co-occur cumulatively with the other asset returns over the investor’s...

Polynomials, trigonometric polynomials, and rational functions are widely used for the discrete approximation of functions or simulation models. Often, it is known beforehand, that the underlying unknown function has certain properties, e.g., nonnegative or increasing on a certain region....

Despite linear programming and duality have correctly been incorporated in algorithms to compute the nucleolus, we have found mistakes in how these have been used in a broad range of applications. Overlooking the fact that a linear program can have multiple optimal solutions and neglecting the...

This paper develops tools for analyzing properties of stochastic objective functions which take the form (formula). The paper analyzes the relationship between properties of the primitive functions, such as utility functions u and probability distributions F, and properties of the stochastic...

In this paper we present the algorithmic framework and practical aspects of implementing a parallel version of a primal-dual semidefinite programming solver on a distributed memory computer cluster. Our implementation is based on the CSDP solver and uses a message passing interface (MPI), and...

We study the problem of how to design a sparse flexible process structure in a balanced and symmetrical production system to match supply with random demand more effectively. Our goal is to provide an optimal design, i.e., the sparsest design, to achieve (1-ε)-optimality relative to the fully...

When a disaster strikes an area, often international assistance is requested to help responding to and recovering from the disaster. The response is often characterized by the dispatch of relief items to the affected regions via depots from Humanitarian Logistics Service Providers (HLSPs). One...