DFT schemes based on conventional and less conventional exchange-correlation (XC) functionals have been employed to determine the polarizability and second hyperpolarizability of π-conjugated polyacetylene chains. These functionals fail in one or more of several ways: (i) the correlation correction to α is either much too small or in the wrong direction, leading to an overestimate; (ii) γ is significantly overestimated; (iii) the chain length dependence is excessively large, particularly for γ and for the more alternant system; and (iv) the bond length alternation effects on γ are either underestimated or qualitatively incorrect. The poor results with the asymptotically correct van Leeuwen–Baerends XC potential show that the overestimations are not related to the asymptotic behavior of the potential. These failures are described in terms of the separate effects of the exchange and the correlation parts of the XC functionals. They are related to the short-sightedness of the XC potentials which are relatively insensitive to the polarization charge induced by the external electric field at the chain ends.

Density functional calculations on the (non)linear optical properties of conjugated molecular chains using currently popular exchange-correlation (xc) potentials give overestimations of several orders of magnitude. By analyzing “exact” and Krieger-Li-Iafrate xc potentials, the error is traced back to an incorrect electric field dependence of the “response part” of the xc potential in local and gradient-corrected density approximations, which lack a linear term counteracting the applied electric field.