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Martingale Approach to Stochastic Control with Discretionary Stopping

Journal Article · · Applied Mathematics and Optimization
 [1];  [2]
  1. Departments of Mathematics and Statistics, 619 Mathematics Building, Columbia University, MC 4438, New York, NY 10027 (United States)
  2. Department of Mathematics, Baruch College, CUNY, New York, NY 10010 (United States)

We develop a martingale approach for continuous-time stochastic control with discretionary stopping. The relevant Dynamic Programming Equation and Maximum Principle are presented. Necessary and sufficient conditions are provided for the optimality of a control strategy; these are analogues of the 'equalization' and 'thriftiness' conditions introduced by Dubins and Savage (1976) in a related, discrete-time context. The existence of a thrifty control strategy is established.

OSTI ID:
21067425
Journal Information:
Applied Mathematics and Optimization, Journal Name: Applied Mathematics and Optimization Journal Issue: 2 Vol. 53; ISSN 0095-4616
Country of Publication:
United States
Language:
English

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