Review of Behavioral Economics > Vol 5 > Issue 2

Normal Forms for Switch Point Patterns

Robert L. Vienneau, Independent Researcher, rvien@dreamscape.com
 
Suggested Citation
Robert L. Vienneau (2018), "Normal Forms for Switch Point Patterns", Review of Behavioral Economics: Vol. 5: No. 2, pp 169-195. http://dx.doi.org/10.1561/105.00000080

Published: 13 Sep 2018
© 2018 R. L. Vienneau
 
Subjects
Behavioral Economics,  Complexity,  Economic Theory: Microeconomic Theory,  Economic Theory: Mathematical Economics
 
Keywords
JEL Codes: B51C67D24
Choice of techniqueReswitchingCapital-reversingCambridge capital controversy
 

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In this article:
1. Introduction
2. A Model of Prices of Production and the Choice of Technique
3. A Numerical Example with Varying Coefficients of Production
4. Normal Forms for Variations in Switch Points
5. Discussion of Patterns of Switch Points
6. Conclusion
References

Abstract

The choice of technique can be analyzed, in a circulating-capital model of prices of production, by constructing the wage frontier. Switch points arise when more than one technique is costminimizing for a specified rate of profits. This article defines four normal forms for variations in the number and sequence of switch points with a perturbation of, for example, a coefficient of production. The ’perversity’ of switch points that appear on and disappear from the wage frontier is analyzed. The conjecture is made that no other normal forms for local patterns of co-dimension one exist.

DOI:10.1561/105.00000080