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Let $$f:\mathbb{R}_{+}^2 \rightarrow \mathbb{R}$$ be $$f(x_1,x_2)=x_1^a x_2^b$$ for $$a>0$$ and $$b>0$$ Find restrictions on a>0 and b>0 that ensure that f(x_1,x_2) is concave.
I tried solving this by finding the principal minors of the Hessian of this function and making first principal minor be less or equal to zero and second principal minor be greater or equal to zero(conditions for a function to be concave). It is easy with the first principal minor, but I cannot workout the second principal minor to have a strong inequality.
$$H(x)=\left| \begin{array}{cc} f_{xx} & f_{xy} \\ f_{yx} & f_{yy} \end{array} \right|$$
$$f_{xx}=\frac{\partial^2 f}{\partial x_1^2}=a(a-1)x_2^b x_1^{a-2}$$
$$f_{xy}=\frac{\partial^2f}{\partial x_1 \partial x_2}=ab x_1^{a-1} x_2^{b-1}$$
$$f_{yx}=\frac{\partial^2f}{\partial x_2 \partial x_1}=ab x_1^{a-1} x_2^{b-1}$$
$$f_{yy}=\frac{\partial^2f}{\partial x_2^2}=b(b-1)x_1^a x_2^{b-2}$$
First principal minor:
$$f_{xx}=a(a-1)x_2^b x_1^{a-2} \leq 0$$ restriction on a is $$a<1$$
Second principal minor:
$$f_{xx} f_{yy} - f_{xy} f_{yx} = ax_2^b (a-1) x_1^{a-2} bx_1^a (b-1)x_2^{b-2} - a^2 b^2 x_1^{2a-2} x_2^{2b-2} \geq 0$$ restriction on b?
I might have computed the second partial derivatives for the Hessian wrong, so if you can please try solving this problem from scratch.
I tried solving this by finding the principal minors of the Hessian of this function and making first principal minor be less or equal to zero and second principal minor be greater or equal to zero(conditions for a function to be concave). It is easy with the first principal minor, but I cannot workout the second principal minor to have a strong inequality.
$$H(x)=\left| \begin{array}{cc} f_{xx} & f_{xy} \\ f_{yx} & f_{yy} \end{array} \right|$$
$$f_{xx}=\frac{\partial^2 f}{\partial x_1^2}=a(a-1)x_2^b x_1^{a-2}$$
$$f_{xy}=\frac{\partial^2f}{\partial x_1 \partial x_2}=ab x_1^{a-1} x_2^{b-1}$$
$$f_{yx}=\frac{\partial^2f}{\partial x_2 \partial x_1}=ab x_1^{a-1} x_2^{b-1}$$
$$f_{yy}=\frac{\partial^2f}{\partial x_2^2}=b(b-1)x_1^a x_2^{b-2}$$
First principal minor:
$$f_{xx}=a(a-1)x_2^b x_1^{a-2} \leq 0$$ restriction on a is $$a<1$$
Second principal minor:
$$f_{xx} f_{yy} - f_{xy} f_{yx} = ax_2^b (a-1) x_1^{a-2} bx_1^a (b-1)x_2^{b-2} - a^2 b^2 x_1^{2a-2} x_2^{2b-2} \geq 0$$ restriction on b?
I might have computed the second partial derivatives for the Hessian wrong, so if you can please try solving this problem from scratch.
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