A dynamic programming approach to optimal pollution control under uncertain irreversibility: The Poisson case

Reference : A dynamic programming approach to optimal pollution control under uncertain irreversi...


	Document type :	E-prints/Working papers : First made available on ORBilu
	Discipline(s) :	Business & economic sciences : Quantitative methods in economics & management
	Focus Areas :	Sustainable Development
	To cite this reference:	http://hdl.handle.net/10993/51922

Title :	A dynamic programming approach to optimal pollution control under uncertain irreversibility: The Poisson case
Language :	English
Author, co-author :	Boucekkine, Raouf []
	Ruan, Weihua []
	Zou, Benteng [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) >]
Publication date :	Aug-2022
Number of pages :	19
Peer reviewed :	No
Keywords :	[en] Multi-stage optimal control ; Poisson process ; HJB equations
Abstract :	[en] We solve a bimodal optimal control problem with a non-concavity and uncertainty through a Poisson process underlying the transition from a mode to another. We use a dynamic programming approach and are able to uncover the global optimal dynamics (including optimal non-monotonic paths) under a few linear-quadratic assumption, which do not get rid of the non-concavity of the problem. This is in contrast to the related literature on pollution control under irreversibility which usually explores local dynamics along monotonic solution paths to first order Pontryagin conditions.
Permalink :	http://hdl.handle.net/10993/51922

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