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Topic: g(p) is convex and we have multiple equilibrum
Conf: Corrections and Errata, Msg: 14239
From: Sven Tengstam (sven.tengstam@hgus.gu.se)
Date: 2/26/2004 08:41 AM

g(p) is convex and we have multiple equilibrum Sven Tengstam Sven sven.tengstam@hgus.gu.se Hi!

Thanks for a great book! I have one question:
On page 334 it says that h(p) is concave and thereby g(p) is also concave. But I think h(p) (and g(p)) is convex since u is concave. Am I right?

And it says that we have a unique equilibrium. But if we choose
L=1
w=1
u=sqrt
we get p= 0.75 or 1.

Best regards
Sven