Optimal control and differential game approaches in environmental and resource economics

Abstract

This paper presents, in brief, the fundamentals of optimal control theory together with some notes for differential games, which is the game theoretic analogue of the optimal control. As it is recommended by literature references the main tool of analysis in open loop information structure for environmental models is the Pontryagin’s Maximum Principle, while the Hamilton–Jacobi–Bellman equation is the tool of analysis for any closed loop informational structure. As applications of the above theoretic considerations we present some environmental economic models which are solved both as optimal control problems and as differential games as well.

Keywords. Optimal control; Differential games; Renewable resources; Environnemental and Resource Economies.

JEL. C61; C62; D43; Q0; Q2; Q20; Q50; Q52; Q53.

SDG: SDG13, SDG17.