Mathematics for Economists

(Greg DeLong) #1

Unconstrained local necessary conditions


In the unconstrained casef is deÖned on an open set. Use the
"variations"g(t)$f(x 0 +th)and chain rule.

Theorem


If x 0 is a local minimum then

(^10) =fx^0 (x 0 )=(∂f/∂x 1 (x 0 ),.. .,∂f/∂xn(x 0 )).
(^20) hTfxx^00 (x 0 )h=∑
i



j

∂^2 f/∂xi∂xj(x 0 )hihj

Observe that one needs just twice di§erentiability atx 0.
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