Title

Optimization in a vintage capital model with piecewise linear cost function

Document Type

Article

Publication Date

12-15-2006

Abstract

The paper investigates a nonlinear optimal control problem for the Volterra integral equations with an unknown function in the lower limit of integration. The applied interpretation of the problem consists of the optimal renovation of vintage capital under the embodied technological change. An explicit solution is constructed and its properties are analyzed in the case of a nonlinear revenue dependence on product output. © 2006 Elsevier Ltd. All rights reserved.

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