We study optimal adaptive grazing management under uncertain rainfall in a discrete-time model. As in each year actual rainfall can be observed during the short rainy season, and grazing management can be adapted accordingly for the growing season, the closed-loop solution of the stochastic...

A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...

The standard model of inter-temporal optimization is based upon certainty equivalence and ignores risk and uncertainty. We solve a modification of the standard model of inter-temporal optimization in an environment where the return to capital is stochastic, and we impose the constraint that...

Based on economic methodology we model an ecosystem with two species in predator-prey relationship: mice feed on grain and grain feeds on a resource. With optimizing behavior of individual organismus a short-run ecosystem equilibrium is defined and characterized that depends on the farmer's use...

Based on economic methodology we model an ecosystem with two species in predator-prey relationship: mice feed on grain and grain feeds on a resource. With optimizing behaviour of individual organisms a short-run ecosystem equilibrium is defined and characterized that depends on the farmer's use...

Biodiversity is often adversely affected by human activities. This reduces social welfare but may be external to private economic decisions. Consequently, these external effects on biodiversity need to be considered explicitly in economic models, which is only partly reflected in the literature....

In this article we analyze how the presence of thresholds influences multi agent decision making situations. We introduce a class of discounted autonomous optimal control problems with threshold effects and discuss tools to analyze these problems. Later, using these results we investigate two...

Introduction/preface -- Failure of the Fed, IMF, academic profession to anticipate the crisis, disregarded warnings -- Failure of the Quants, mathematical finance models -- Philosophy of Stochastic optimal control approach, relation to M-V analysis; Sensitivity of optimal debt and risk to...