Transversality Conditions for Higher Order Infinite Horizon Discrete Time Optimization Problems
arXiv:1004.3093
Abstract
In this paper, we examine higher order difference problems. Using the "squeezing" argument, we derive both Euler's condition and the transversality condition. In order to derive the two conditions, two needed assumptions are identified. A counterexample, in which the transversality condition is not satisfied without the two assumptions, is also presented.