Hi

I have a problem in solving the residuals of the model equations.

Here is my equation, calvo pricing, for example,

p_x^(1-v)=d*(p_x(-1)*pistar)^(1-v)+(1-d)*(p_xt^(1-v));

exist residual.

But the value of both right and left side are the same when in the part of given initial values.

I test in the .m file to verify it.

…

t1= p_x^(1-v)

t2=d*(p_x(-1)*pistar)^(1-v)+(1-d)*(p_xt^(1-v))

t2 is equal to t1!!

How could this happen? I’m sure i didn’t redefine the variable’s value.

Is there any mistake will cause this kind of inconsistency?