Democrats in the US say that taxes can be used to "grease the wheels" of the economy and create wealth enough to recover taxes and thereby increase employment; the Republicans say that taxation discourages investment and so increases unemployment. These arguments cannot both be correct, but both...

Abstract We consider a sequential testing problem of three hypotheses that the unknown drift of a Brownian motion takes one of three values. We show that this problem can be solved by a reduction to an optimal stopping problem for local times of the observable process. For the case of...