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to mathematical optimization, Richard Bellman's Principle of Optimality is based on the idea that in order to solve a dynamic optimization problem from some starting period t to some ending period T, one implicitly has to solve subproblems starting from later dates s, where t. This is an example of optimal substructure. The Principle of Optimality is used to derive the Bellman equation, which shows how the value of the problem starting from t is related to the value of the problem starting from s.

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