OPTIMALITY CONDITIONS AND COMPARATIVE STATICS FOR HORIZON AND END-POINT CHOICES IN OPTIMAL-CONTROL THEORY

First-order necessary conditions for choosing the horizon and endpoints are wellknown in the optimal control literature. We derive second-order necessary and sufficient conditions for such choices, and provide an economic interpretation of them in the context of two well-known economic models. The comparative static properties of the endpoint and horizon choices are then characterized, via primal and primal-dual methods, and an economic example of the comparative static results is also given.