Optimal control of a stochastic system: State-costate analysis

E. Khmelnitsky, G. Singer

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

We consider infinite and finite time horizon, discounted cost minimization problems for a system perturbed by a Wiener process. The controller is bounded in magnitude and allowed to control the drift parameter of the process. Using the necessary conditions of optimality, which are expressed in terms of costate dynamics, we prove the optimality of a threshold control policy. The threshold line is calculated either analytically for an infinite time horizon, or numerically for a finite time horizon. The policy is global in the sense that controls for all initial conditions in a region of the state space are obtained.

Original languageEnglish
Title of host publicationProceedings of the 26th IASTED International Conference on Modelling, Identification, and Control, MIC 2007
Pages224-228
Number of pages5
StatePublished - 2007
Externally publishedYes
Event26th IASTED International Conference on Modelling, Identification, and Control, MIC 2007 - Innsbruck, Austria
Duration: 12 Feb 200714 Feb 2007

Publication series

NameProceedings of the IASTED International Conference on Modelling, Identification, and Control, MIC
ISSN (Print)1025-8973

Conference

Conference26th IASTED International Conference on Modelling, Identification, and Control, MIC 2007
Country/TerritoryAustria
CityInnsbruck
Period12/02/0714/02/07

Keywords

  • Diffusion process
  • Stochastic control
  • Threshold policy

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