The Equivalence of Team Theory's Integral Equations and a Cauchy System: Sensitivity Analysis of a Variational Problem.
UNIVERSITY OF SOUTHERN CALIFORNIA LOS ANGELES MODELLING RESEARCH GROUP
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Team decision theory studies the problem of how a group of decision makers should use information to coordinate their actions. Mathematically, the task is to find functions that maximize an objective functional. The Euler equations take the form of a system of integral equations. In this paper, it will be shown that a class of such integral equations have solutions that are identical to the solutions of a system of initial valued integrodifferential equations. This Cauchy system describes the sensitivity of the solutions to underlying parameters and provides an efficient technique for solving difficult team decision problems. An analysis of a profit maximizing firm demonstrates the usefulness of the Cauchy system. Author
- Numerical Mathematics
- Operations Research