Solving optimal timing problems in environmental economics

Two papers of (Pindyck, 2000) and (Pindyck, 2002) that modeled the control of stock pollutants as optimal stopping problems contained closed form solutions that are incorrect. This paper discusses a subtle error in the derivation and demonstrates how solutions to these and related problems can be obtained numerically. The numerical solutions are contrasted with the ones contained in Pindyck's original papers.

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Year of publication:	2011
Authors:	Balikcioglu, Metin ; Fackler, Paul L. ; Pindyck, Robert S.
Published in:	Resource and Energy Economics. - Elsevier, ISSN 0928-7655. - Vol. 33.2011, 3, p. 761-768
Publisher:	Elsevier
Keywords:	Environmental policy Uncertainty Optimal stopping Irreveribilities Climate change

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009194627