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Problem Set #3, Probiem Set #3 (not to be tumed in -a solution set will be distributed about a week after problem sets are distributed) 1, Luenberger, p. 356, #3 2. Luenberger, p. 357, #5. Construct phase diagrams for each case 3. Consider a linear dynamic system Ax x(0) > 0 x where ai 0. (@ Show that if laul> Day Vis, then V 2, ls is a Liapunov function for this system. (HINT: Note that [x,| is differentiable, though with different derivatives, at all points except the origin.) (Gi) If there exists { dy, .. dy} with dj >0.j= 1, ajayl> F453 Viel, nsuch that Find a Liapunov function for the system. Prove your resuit. (HINT: Modify (i).) (ii) Consider n firms producing identical products. If the i-th firm produces qi quantities, i fn then the price for the product would be p= od, a where D(+) represents the inverse demand function for the product with D') <0. Each firm also forms price expectation p; via the following dynamic equation B= a(P- Pd) where a,>0, Vi Problem Set #3 Professor Edison Tse ‘This implies that each firm will adjust its own expected price depending whether the actual price is above or below its previous expected price. Firm i has a marginal production cost function given by MCgp =Ke@= MV i= ‘Assume that each firm decides on gj based on MC iQ) = Pi Write a set of differential equations involving oniy pi. iv) What is the equilibrium point for such a set of éifferential equations? Using Gi) above show that the equilibrium point is locally stable if fof dav Visit where B is the equilibrium price and G; is the solution of MC(Q)) = p. idison Tse Professor 4. (3) Consider a dynamic system X= L(x): xe FR e) with £0) 0, Assume that a Liapunov function V(x) has heen found for the above system. Now consider another dynamic system He L(x) + AG)VVT(x) ey where A(x) is a skew-symmetric matrix, i.e. A(x) =-AT(x) vx Show that if A(x) skew-symmetric, then yTA(x)y = 0, where y is an arbitrary n- element vector. Use this result to prove that the original Liapunoy function for (*), V(x) is also a Liapunoy function for (**). (Gi) Consider the following dynamic system y= ey) g(x) 2 Oand g(x,) = 0 x, =0 @ ong ®) Show that Vy(x,) of * pqu)du, > 0 and V9(xq) = x3 are Liaponov functions for (a) x, and (b), respectively. If we consider the joint dynamic system x22 xe[2] © =X Find a Liapunov function V(x) for (c) in terms of V (x1) and V2(x2). (iii) Find a Liapwnov function for the following dynamic system: 3) =x2~ ax) x2 +(1— Bg) Give sufficient conditions for the above system to be stable. (HINT: Make use of (i) and Gi.)