@article{4fe0dda049454f4d98f2139e5e30f946,
title = "Stochastic evolution and control of an economic activity",
author = "Deshmukh, {S. D.} and Chikte, {S. D.}",
note = "Funding Information: Consider an economic activity to which resources are allocated over time, on the basis of periodic assessmenot f the activity status during the course of its evolution. Often the effect of an allocation on the activity status is stochastic due to endogenous and exogenous uncertainties. A larger allocation yields greater progress on average (resulting in a greater improvement in the activity status). On the other hand, a smaller allocation is more likely to lead to a setback (resulting in a deterioration of the activity status) due to stochastic obsolescencea nd undesirable environmental disturbances. Suppose that the reward from the activity is collected once the allocation process is stopped and the activity terminated, depending upon its terminal status. At any point in time during its evolution, the decision maker in charge of such an activity must determine whether he should conclude its conduct and collect the terminal reward, or he should continue the allocation process, in which case he should also select the amount of further resource expenditures. An example of such an activity is provided by the R & D project management problem (e.g., see [8, 9, 121). The R & D activity status may be represented by the quality of the product developed so far, relative to other competing products currently in the market. The relative product quality * We wish to thank the associate editor and the referee for their helpful comments on the previous version of this paper. This research was partially supported by NSF Grant GS-28287.",
year = "1977",
month = jun,
doi = "10.1016/0022-0531(77)90070-9",
language = "English (US)",
volume = "15",
pages = "112--122",
journal = "Journal of Economic Theory",
issn = "0022-0531",
publisher = "Academic Press Inc.",
number = "1",
}