Abstract
Many companies maximize the present value of profit over some time horizon. If the company's problem is an autonomous control problem, then present value equals the Hamiltonian's decrease over the time horizon divided by the discount factor.
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Kamien, M. I., andSchwartz, N. L.,Dynamic Optimization: The Calculus of Variations and Optimal Control in Economics and Management, North-Holland, New York, New York, 1981.
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Communicated by J. Abadie
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Bordley, R. When present value equals the change in the Hamiltonian. J Optim Theory Appl 57, 511–512 (1988). https://doi.org/10.1007/BF02346167
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DOI: https://doi.org/10.1007/BF02346167