@@ -276,11 +276,14 @@ def price_single_beliefs(transition, dividend_payoff, β=.75):
|
276 | 276 | """ |
277 | 277 | Function to Solve Single Beliefs |
278 | 278 | """ |
279 | | - # First compute inverse piece |
280 | | - imbq_inv = la.inv(np.eye(transition.shape[0]) - β * transition) |
| 279 | + # First compute (I - βQ) |
| 280 | + A = np.eye(transition.shape[0]) - β * transition |
281 | 281 | |
282 | | - # Next compute prices |
283 | | - prices = β * imbq_inv @ transition @ dividend_payoff |
| 282 | + # Next compute βQd |
| 283 | + b = β * (transition @ dividend_payoff) |
| 284 | + |
| 285 | + # Solve linear system |
| 286 | + prices = la.solve(A, b) |
284 | 287 | |
285 | 288 | return prices |
286 | 289 | ``` |
|