Shadow Prices for Measures of Effectiveness, I: Linear Model

Published Online:https://doi.org/10.1287/opre.41.3.518

This is the first of two papers dealing with the establishment of shadow prices for measures of effectiveness in an optimization-based combat model. In this paper we explain how the requirement for the analysis arose, and we show how to build a simple linear model that produces shadow, prices for kill requirements. When the model is further specialized, these shadow prices become the classical eigenvalue weights familiar from Lanchester theory.

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