Estimation and Optimal Control of an Uncertain Production Process

C. Robert Taylor and Jean-Paul Chavas ()

American Journal of Agricultural Economics, 1980, vol. 62, issue 4, 675-680

Abstract: Three alternative decision rules for estimation and control of an uncertain production process are examined. One is a certainty equivalence strategy whereby an optimal rate based on current estimates of production parameters is used throughout the planning horizon. A second is updated certainty equivalence, a passively adaptive strategy. Third is an actively adaptive control formulation. Monte-Carlo simulation results show that the passively adaptive strategy outperforms the others. For the cases simulated, the actively adaptive approximation to the information state for a dual control problem is not good enough to establish superiority of this sophisticated strategy for all problems.

Date: 1980
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:62:y:1980:i:4:p:675-680.

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