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Journal of Undergraduate Research

Keywords

higher-dimensional objective functions, local extrema, non-concave sections

College

Physical and Mathematical Sciences

Department

Computer Science

Abstract

Economic models are built from economic theory for applications ranging from evaluating past policies to predicting future market behavior. Estimation of these models often requires the use of nonlinear optimization routines. As a result, the objective function being optimized is often characterized by local extrema, saddles, and relatively flat areas which make it difficult for search algorithms to converge at global extrema. Currently, only crude and subjective solutions are utilized in applied research, resembling simple guess and check strategies.

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