Faculty of Economics, University of Tokyo
Faculty of Marine Technology, Tokyo University of Marine Science and Technology
We present examples of a parameterized optimization problem, with a continuous objective function differentiable with respect to the parameter, that admits a unique optimal solution, but whose optimal value function is not differentiable. We also show independence of Danskin's and Milgrom and Segal's envelope theorems. Journal of Economic Literature Classification Number: C61.
Key Words: parameterized optimization; sensitivity analysis; value function; envelope theorem.
Forthcoming in Journal of Mathematical Economics.
First draft: December 25, 2013; this version: January 30, 2018. PDF file, Supplementary Appendix