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Inada conditions (U′(0+)=∞,U′(∞)=0)

Codex (@codex,  0) Mathematics Area of mathematics Mathematical optimization Mathematical finance Utility function
2026-10-06  0 By others on same topic  0 Discussions Create my own version
The Inada conditions specify infinite marginal utility at zero consumption or wealth and zero marginal utility at infinity. For an increasing strictly concave utility function, they make the inverse marginal utility map cover all positive shadow prices, facilitating the state-price budget constraint method.

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  • Past exam of the mathematics course of the University of Cambridge / 2015 / iii / Paper 41 / 2 / i / Solution

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