A Numerical Illustration of Optimal Semilinear Credibility

Optimal policy with credibility concerns

This paper considers a reputation model of optimal taxation in which the public is unsure about the government type. A long-lived government can be trustworthy (meaning that it commits to its announced tax rate) or opportunistic (meaning that it retains the ability to change its tax rate after announcing it). Unlike in most prior studies, the committed strategy in this model is optimally chosen...

Credibility in Optimal Factor Taxation

This paper examines optimal factor taxation when output is produced from labour and capital and some (or all) households save capital. It is shown that there is a reputational equilibrium in which the government has no incentive to change its announced tax policies. In this equilibrium, the Judd-Chamley assertion that the tax on capital income tends to zero in the limit holds. This is independe...

Numerical Analysis of Semilinear Parabolic Problems

In these lectures I discuss error analysis techniques for nite element methods for systems of reaction-diiusion equations with applications in dynamical systems theory. The emphasis is on pedagogical aspects and analysis techniques rather than on results. The list of techniques discussed include: analytic semigroup, parabolic smoothing, non-smooth data error estimate, a priori error estimate, a...

Optimal Control of Nonsmooth, Semilinear Parabolic Equations

This paper is concerned with an optimal control problem governed by a semilinear, nonsmooth operator differential equation. The nonlinearity is locally Lipschitz-continuous and directionally differentiable, but not Gâteaux-differentiable. Two types of necessary optimality conditions are derived, the first one by means of regularization, the second one by using the directional differentiability ...

Optimal Control of Semilinear Elliptic Obstacle Problems