Robust Control: A Note on the Response of the Control to Changes in the 'Free' Parameter Conditional on the Character of Nature

Computational Economics, Vol. 24, pp. 223-238, 2004

Posted: 27 Aug 2008

See all articles by Fidel Gonzalez

Fidel Gonzalez

Sam Houston State University - College of Business Administration - Department of Economics and International Business

Arnulfo Rodriguez

Independent Scholar

Date Written: 2004

Abstract

In this paper an analytical framework similar to a robust control problem was developed for the one-state, one-control variable model to examine the response of the control variable to change in the "free" parameter. However, in contrast to Gonzalez and Rodriguez (2003), the sign multiplying the "free" parameter in the criterion function of the min-max problem is positive. We find that this set up ocrresponds to the case where nature is benevolent while the problem posed by Gonzalez and Rodriguez (2003) corresponds to a malevolent nature. We show that for the benevolent case, the solution is a minimum giving way to an ordinary control problem. In addition, the left side od the discontinuity in Gonzalez and Rodriguez (2003) corresponds to the benevolent case.

Keywords: Approximating Model, Optimal Control, Robustness

JEL Classification: C61, E61

Suggested Citation

Gonzalez, Fidel and Rodriguez, Arnulfo, Robust Control: A Note on the Response of the Control to Changes in the 'Free' Parameter Conditional on the Character of Nature (2004). Computational Economics, Vol. 24, pp. 223-238, 2004. Available at SSRN: https://ssrn.com/abstract=1259203

Fidel Gonzalez (Contact Author)

Sam Houston State University - College of Business Administration - Department of Economics and International Business ( email )

Huntsville, TX 77341-2118
United States

Arnulfo Rodriguez

Independent Scholar ( email )

Mexico City, DF 06100
Mexico

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