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The control of environmental pollution and optimal investment and employment decisions
Author(s) -
Lin Winston T.
Publication year - 1987
Publication title -
optimal control applications and methods
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 44
eISSN - 1099-1514
pISSN - 0143-2087
DOI - 10.1002/oca.4660080103
Subject(s) - pollution , control (management) , investment (military) , economics , optimal control , stock (firearms) , investment decisions , control variable , natural resource economics , microeconomics , engineering , mathematics , mathematical optimization , production (economics) , statistics , mechanical engineering , ecology , management , politics , political science , law , biology
This paper develops an optimal control model for the firm's decision‐making concerning pollution control spending, employment and investment. The model explicitly considers the impact of adjustment costs of changing the level of the pollution stock and involves three state variables and two control variables. Necessary conditions are derived by the maximum principle. The results include an optimal employment‐investment‐pollution abatement programme, an optimal pollution control decision rule, the equilibrium optimal pollution control and spending plan, and the equilibrium employment‐investment decision.