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Nonconvex Duality and Semicontinuous Proximal Solutions of HJB Equation in Optimal Control

Mustapha Serhani, Nadia Raïssi (2009)

RAIRO - Operations Research

In this work, we study an optimal control problem dealing with differential inclusion. Without requiring Lipschitz condition of the set valued map, it is very hard to look for a solution of the control problem. Our aim is to find estimations of the minimal value, (α), of the cost function of the control problem. For this, we construct an intermediary dual problem leading to a weak duality result, and then, thanks to additional assumptions of monotonicity of proximal subdifferential, we give a more...

Notes on free lunch in the limit and pricing by conjugate duality theory

Alena Henclová (2006)

Kybernetika

King and Korf [KingKorf01] introduced, in the framework of a discrete- time dynamic market model on a general probability space, a new concept of arbitrage called free lunch in the limit which is slightly weaker than the common free lunch. The definition was motivated by the attempt at proposing the pricing theory based on the theory of conjugate duality in optimization. We show that this concept of arbitrage fails to have a basic property of other common concepts used in pricing theory – it depends...

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