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30 changes: 14 additions & 16 deletions source/rst/von_neumann_model.rst
Original file line number Diff line number Diff line change
Expand Up @@ -14,8 +14,8 @@ Von Neumann Growth Model (and a Generalization)
**Co-author:** Balint Szoke

This notebook uses the class ``Neumann`` to calculate key objects of a
linear growth model of John von Neumann (1937) :cite:`von1937uber` that was generalized by
Kemeny, Moregenstern and Thompson (1956) :cite:`kemeny1956generalization`.
linear growth model of John von Neumann :cite:`von1937uber` that was generalized by
Kemeny, Morgenstern and Thompson :cite:`kemeny1956generalization`.

Objects of interest are the maximal expansion rate (:math:`\alpha`), the
interest factor (:math:`β`), and the optimal intensities (:math:`x`) and
Expand Down Expand Up @@ -55,8 +55,7 @@ The code below provides the ``Neumann`` class

"""
This class describes the Generalized von Neumann growth model as it was
discussed in Kemeny et al. (1956, ECTA) :cite:`kemeny1956generalization`
and Gale (1960, Chapter 9.5) :cite:`gale1989theory`:
discussed in Kemeny et al. (1956, ECTA) and Gale (1960, Chapter 9.5):

Let:
n ... number of goods
Expand Down Expand Up @@ -141,7 +140,6 @@ The code below provides the ``Neumann`` class
"""
Calculate the trivial upper and lower bounds for alpha (expansion rate)
and beta (interest factor). See the proof of Theorem 9.8 in Gale (1960)
:cite:`gale1989theory`
"""

n, m = self.n, self.m
Expand Down Expand Up @@ -409,7 +407,7 @@ for all :math:`j\in S`, :math:`\exists i\in T`, s.t. :math:`b_{i,j}>0`.
The economy is **irreducible** if there are no proper independent
subsets.

We study two examples, both coming from Chapter 9.6 of Gale (1960) :cite:`gale1989theory`
We study two examples, both coming from Chapter 9.6 of Gale :cite:`gale1989theory`

.. code-block:: python3

Expand Down Expand Up @@ -540,7 +538,7 @@ and a number :math:`\alpha\in\mathbb{R}`, s.t.
&\text{s.t. }\hspace{2mm}x^T B \geq \alpha x^T A
\end{aligned}

Theorem 9.3 of David Gale’s book :cite:`gale1989theory` assets that if Assumptions I and II are
Theorem 9.3 of David Gale’s book :cite:`gale1989theory` asserts that if Assumptions I and II are
both satisfied, then a maximum value of :math:`\alpha` exists and it is
positive.

Expand Down Expand Up @@ -578,7 +576,7 @@ that under Assumptions I and II, :math:`\beta_0\leq \alpha_0`.
But in the other direction, that is :math:`\beta_0\geq \alpha_0`,
Assumptions I and II are not sufficient.

Nevertheless, von Neumann (1937) :cite:`von1937uber` proved the following remarkable
Nevertheless, von Neumann :cite:`von1937uber` proved the following remarkable
“duality-type” result connecting TEP and EEP.

**Theorem 1 (von Neumann):** If the economy :math:`(A,B)` satisfies
Expand Down Expand Up @@ -632,7 +630,7 @@ fact, it does not rule out (trivial) cases with :math:`x_0^TBp_0 = 0` so
that nothing of value is produced.

To exclude such uninteresting cases,
Kemeny, Morgenstern and Thomspson (1956) add an extra requirement
Kemeny, Morgenstern and Thomspson :cite:`kemeny1956generalization` add an extra requirement

.. math:: x^T_0 B p_0 > 0

Expand Down Expand Up @@ -687,7 +685,7 @@ From the famous theorem of Nash (1951), it follows that there always
exists a mixed strategy Nash equilibrium for any *finite* two-player
zero-sum game.

Moreover, von Neumann’s Minmax Theorem (1928) :cite:`neumann1928theorie` implies that
Moreover, von Neumann’s Minmax Theorem :cite:`neumann1928theorie` implies that

.. math::
V(C) = \max_x \min_p \hspace{2mm} x^T C p = \min_p \max_x \hspace{2mm} x^T C p = (x^*)^T C p^*
Expand Down Expand Up @@ -730,7 +728,7 @@ of view) is the *dual* LP
\end{aligned}


Hamburger, Thompson and Weil (1967) :cite:`hamburger1967computation` view the input-output pair of the
Hamburger, Thompson and Weil :cite:`hamburger1967computation` view the input-output pair of the
economy as payoff matrices of two-player zero-sum games. Using this
interpretation, they restate Assumption I and II as follows

Expand Down Expand Up @@ -806,7 +804,7 @@ It is clear from the above argument that :math:`\beta_0`,
:math:`\alpha_0` are the minimal and maximal :math:`\gamma` for which
:math:`V(M(\gamma))=0`.

Moreover, Hamburger et al. (1967) :cite:`hamburger1967computation` show that the
Moreover, Hamburger et al. :cite:`hamburger1967computation` show that the
function :math:`\gamma \mapsto V(M(\gamma))` is continuous and
nonincreasing in :math:`\gamma`.

Expand All @@ -817,7 +815,7 @@ input-output pair :math:`(A, B)`.
Algorithm
---------

Hamburger, Thompson and Weil (1967) :cite:`hamburger1967computation` propose a simple bisection algorithm
Hamburger, Thompson and Weil :cite:`hamburger1967computation` propose a simple bisection algorithm
to find the minimal and maximal roots (i.e. :math:`\beta_0` and
:math:`\alpha_0`) of the function :math:`\gamma \mapsto V(M(\gamma))`.

Expand Down Expand Up @@ -944,7 +942,7 @@ of the two methods we use.
In particular, as will be shown below, in
case of an irreducible :math:`(A,B)` (like in Example 1), the maximal
and minimal roots of :math:`V(M(\gamma))` necessarily coincide implying
a ‘full duality’’ result, i.e. :math:`\alpha_0 = \beta_0 = \gamma^*`,
a ‘full duality’’ result, i.e. :math:`\alpha_0 = \beta_0 = \gamma^*`,
and that the expansion (and interest) rate :math:`\gamma^*` is unique.

Uniqueness and Irreducibility
Expand Down Expand Up @@ -983,7 +981,7 @@ is a self-sufficient part of the economy (a sub-economy) that in
equilibrium can expand independently with the expansion
coefficient :math:`\gamma^*_i`.

The following theorem (see Theorem 9.10. in Gale, 1960 :cite:`gale1989theory`) asserts that
The following theorem (see Theorem 9.10. in Gale :cite:`gale1989theory`) asserts that
imposing irreducibility is sufficient for uniqueness of
:math:`(\gamma^*, x_0, p_0)`.

Expand All @@ -1005,7 +1003,7 @@ These assumptions imply that :math:`B=I_n`, i.e., that :math:`B` can be
written as an identity matrix (possibly after reshuffling its rows and
columns).

The simple model has the following special property (Theorem 9.11. in :cite:`gale1989theory`): if :math:`x_0` and :math:`\alpha_0>0` solve the TEP
The simple model has the following special property (Theorem 9.11. in Gale :cite:`gale1989theory`): if :math:`x_0` and :math:`\alpha_0>0` solve the TEP
with :math:`(A,I_n)`, then

.. math::
Expand Down