shadow price


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shadow price

n
(Economics) economics the calculated price of a good or service for which no market price exists
References in periodicals archive ?
He covers models on finite probability spaces, utility maximization under transaction costs: the case of finite omega, growth-optimal portfolio in the Black-Scholes model, general duality theory, local duality theory, portfolio optimization under transaction costs, shadow price process, and a case study of fractional Brownian motion.
Shadow price restrictions enrich the empirical CU measure by adding priorities in terms of input and output costs which have a significant economic meaning.
Marklund (2007) found that the shadow price mechanism to reduce carbon dioxide marginal abatement cost, through the economic loss computation reduction pay, on the use of policies and measures to reduce carbon dioxide emissions and achieve energy saving and emission reduction.
By implication, therefore, the higher the shadow price of an excluded activity, the lower is its chance of being included in the final plan.
References of inefficient units are identified based on non-zero shadow price resulting from solving its corresponding efficient model (except the shadow price of the first constraint).
11) The shadow price of assaults with injury is $2,500 per incident in 1947 prices.
where r is the discount rate (exogenous), the co-state variable [mu](t) is the current shadow price (in terms of G units) of the state variable K(t), and the l(t) is the current (in G units) marginal opportunity cost of managerial resources.
The "distance-function" approach, as opposed to a conventional production function one, was favoured because: 1) it allows modelling the joint production of multiple outputs; 2) aggregation of outputs or inputs are not required for deriving shadow price; 3) no assumptions of production process behaviour such as cost-minimization or profit-maximization have to be made for deriving shadow prices, and; 4) it allows for shadow price derivation based on the Shephard (1970) duality theory (Fare et al.
where [sigma](j) represents the shadow price of ITQ's for firm j or the instantaneous gain from renting the quota foregone by using the ITQ share for landings; i.
To find out the shadow price of the labour you would now work out what the new optimum production plan and contribution would be if you had one more hour of labour available (meaning you now set 3X + 4Y = 2,001) and solve usually using simultaneous equations.
j] as the shadow price per unit of criterion j = 1, .