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Giorgio Fabbri

Publications and source records attributed to Giorgio Fabbri.

13 recordsLinked to original sources
arXiv2025

Centralized and Competitive Extraction for Distributed Renewable Resources with Nonlinear Reproduction

We study optimal and strategic extraction of a renewable resource that is distributed over a network, migrates mass-conservatively across nodes, and evolves under nonlinear (concave) growth. A subset of nodes hosts extractors while the remaining nodes serve as reserves. We analyze a centralized planner and a non-cooperative game with stationary Markov strategies. The migration operator transports shadow values along the network so that Perron-Frobenius geometry governs long-run spatial allocations, while nonlinear growth couples aggregate biomass with its spatial distribution and bounds global dynamics. For three canonical growth families, logistic, power, and log-type saturating laws, under related utilities, we derive closed-form value functions and feedback rules for the planner and construct a symmetric Markov equilibrium on strongly connected networks. To our knowledge, this is the first paper to obtain explicit policies for spatial resource extraction with nonlinear growth and, a fortiori, closed-form Markov equilibria, on general networks.

math.OC↗
arXiv2025

Optimal Control in Infinite Dimensional Spaces and Economic Modeling: State of the Art and Perspectives

This survey collects, within a unified framework, various results (primarily by the authors themselves) on the use of Deterministic Infinite-Dimensional Optimal Control Theory to address applied economic models. The main aim is to illustrate, through several examples, the typical features of such models (including state constraints, non-Lipschitz data, and non-regularizing differential operators) and the corresponding methods needed to handle them. This necessitates developing aspects of the existing Deterministic Infinite-Dimensional Optimal Control Theory (see, e.g., the book by Li and Yong, 2012) in specific and often nontrivial directions. Given the breadth of this area, we emphasize the Dynamic Programming Approach and its application to problems where explicit or quasi-explicit solutions of the associated Hamilton-Jacobi-Bellman (HJB) equations can be obtained. We also provide insights and references for cases where such explicit solutions are not available.

math.OC↗
arXiv2025

The invisible hand as an emergent property: a gradient flow approach

We develop a general equilibrium model in which, at each instant, a short-run competitive equilibrium arises. Heterogeneity in factor allocation generates differential profit rates across sectors, prompting firms to move between them under myopic profit-seeking behaviour, subject to quadratic reallocation costs. The aggregate dynamics of the economy can be formalised as a gradient flow in a Wasserstein space, starting from a partial differential equation that describes the reallocation of firms across sectors. Two key emergent properties arise: (i) decentralised and uncoordinated decisions can be reinterpreted as the solution to a sequence of global optimisation problems, involving a function of aggregate consumption, which increases monotonically along the dynamic path; (ii) the long-run competitive equilibrium is efficient, as the distribution of firms maximises aggregate consumption and profit rates are equalised across sectors. We extend the baseline model to incorporate non-symmetric preferences, intrasectoral externalities, a fixed cost of reallocation, and labour immobility. These extensions reveal conditions under which the efficiency and uniqueness of the long-run equilibrium may fail, but also highlight the surprising result that the decentralised equilibrium can remain efficient even in the presence of externalities. Finally, using a large sample of EU firms from the period 2018-2023, we empirically document convergence in sectoral profit rates, but not in labour productivity, pointing to a certain degree of labour immobility. We also find evidence suggesting the absence of significant fixed costs of reallocation at the sectoral level, the presence of positive but limited intrasectoral externalities, and a moderate degree of substitutability among goods.

econ.TH↗
arXiv2025

An integral transformation approach to differential games: a climate model application

We develop an Integral Transformation Method (ITM) for the study of suitable optimal control and differential game models. This allows for a solution to such dynamic problems to be found through solving a family of optimization problems parametrized by time. The method is quite flexible, and it can be used in several economic applications where the state equation and the objective functional are linear in a state variable. We illustrate the ITM in the context of a two-country integrated assessment climate model. We characterize emissions, consumption, transfers, and welfare by computing the Nash equilibria of the associated dynamic game. We then compare them to efficiency benchmarks. Further, we apply the ITM in a robust control setup, where we investigate how (deep) uncertainty affects climate outcomes.

econ.TH↗
arXiv2023

Mobility decisions, economic dynamics and epidemic

We propose a model, which nests a susceptible-infected-recovered-deceased (SIRD) epidemic model into a dynamic macroeconomic equilibrium framework with agents' mobility. The latter affect both their income and their probability of infecting and being infected. Strategic complementarities among individual mobility choices drive the evolution of aggregate economic activity, while infection externalities caused by individual mobility affect disease diffusion. The continuum of rational forward-looking agents coordinates on the Nash equilibrium of a discrete time, finite-state, infinite-horizon Mean Field Game. We prove the existence of an equilibrium and provide a recursive construction method for the search of an equilibrium(a), which also guides our numerical investigations. We calibrate the model by using Italian experience on COVID-19 epidemic and we discuss policy implications.

econ.GN↗
arXiv2021

A dynamic theory of spatial externalities

We characterize the shape of spatial externalities in a continuous time and space differential game with transboundary pollution. We posit a realistic spatiotemporal law of motion for pollution (diffusion and advection), and tackle spatiotemporal non-cooperative (and cooperative) differential games. Precisely, we consider a circle partitioned into several states where a local authority decides autonomously about its investment, production and depollution strategies over time knowing that investment/production generates pollution, and pollution is transboundary. The time horizon is infinite. We allow for a rich set of geographic heterogeneities across states. We solve analytically the induced non-cooperative differential game and characterize its long-term spatial distributions. In particular, we prove that there exist a Perfect Markov Equilibrium, unique among the class of the affine feedbacks. We further provide with a full exploration of the free riding problem and the associated border effect.

econ.TH↗
arXiv2020

Verification Results for Age-Structured Models of Economic-Epidemics Dynamics

In this paper we propose a macro-dynamic age-structured set-up for the analysis of epidemics/economic dynamics in continuous time. The resulting optimal control problem is reformulated in an infinite dimensional Hilbert space framework where we perform the basic steps of dynamic programming approach. Our main result is a verification theorem which allows to guess the feedback form of optimal strategies. This will be a departure point to discuss the behavior of the models of the family we introduce and their policy implications.

econ.TH↗
arXiv2017

HJB equations in infinite dimension and optimal control of stochastic evolution equations via generalized Fukushima decomposition

A stochastic optimal control problem driven by an abstract evolution equation in a separable Hilbert space is considered. Thanks to the identification of the mild solution of the state equation as $ν$-weak Dirichlet process, the value processes is proved to be a real weak Dirichlet process. The uniqueness of the corresponding decomposition is used to prove a verification theorem. Through that technique several of the required assumptions are milder than those employed in previous contributions about non-regular solutions of Hamilton-Jacobi-Bellman equations.

math.PR↗
arXiv2016

Infinite dimensional weak Dirichlet processes, stochastic PDEs and optimal control

The present paper continues the study of infinite dimensional calculus via regularization, started by C. Di Girolami and the second named author, introducing the notion of "weak Dirichlet process" in this context. Such a process $\X$, taking values in a Hilbert space $H$, is the sum of a local martingale and a suitable "orthogonal" process. The new concept is shown to be useful in several contexts and directions. On one side, the mentioned decomposition appears to be a substitute of an Itô type formula applied to $f(t, \X(t))$ where $f:[0,T] \times H \rightarrow \R$ is a $C^{0,1}$ function and, on the other side, the idea of weak Dirichlet process fits the widely used notion of "mild solution" for stochastic PDE. As a specific application, we provide a verification theorem for stochastic optimal control problems whose state equation is an infinite dimensional stochastic evolution equation.

math.PR↗
arXiv2016

Infinite dimensional weak Dirichlet processes and convolution type processes

The present paper continues the study of infinite dimensional calculus via regularization, started by C. Di Girolami and the second named author, introducing the notion of weak Dirichlet process in this context. Such a process X, taking values in a Banach space H, is the sum of a local martingale and a suitable orthogonal process. The concept of weak Dirichlet process fits the notion of convolution type processes, a class including mild solutions for stochastic evolution equations on infinite dimensional Hilbert spaces and in particular of several classes of stochastic partial differential equations (SPDEs). In particular the mentioned decomposition appears to be a substitute of an It{ô}'s type formula applied to f (t, X(t)) where f : [0, T ] $\times$ H $\rightarrow$ R is a C 0,1 function and X a convolution type processes.

math.PR↗
arXiv2013

The covariation for Banach space valued processes and applications

This article focuses on a new concept of quadratic variation for processes taking values in a Banach space $B$ and a corresponding covariation. This is more general than the classical one of Métivier and Pellaumail. Those notions are associated with some subspace $χ$ of the dual of the projective tensor product of $B$ with itself. We also introduce the notion of a convolution type process, which is a natural generalization of the Itô process and the concept of $\bar ν_0$-semimartingale, which is a natural extension of the classical notion of semimartingale. The framework is the stochastic calculus via regularization in Banach spaces. Two main applications are mentioned: one related to Clark-Ocone formula for finite quadratic variation processes; the second one concerns the probabilistic representation of a Hilbert valued partial differential equation of Kolmogorov type.

math.PR↗
arXiv2006

On the Dynamic Programming approach to economic models governed by DDE's

In this paper we consider a family of optimal control problems for economic models whose state variables are driven by Delay Differential Equations (DDE's). We consider two main examples: an AK model with vintage capital and an advertising model with delay effect. These problems are very difficult to treat for three main reasons: the presence of the DDE's, that makes them infinite dimensional; the presence of state constraints; the presence of delay in the control. Our main goal is to develop, at a first stage, the Dynamic Programming approach for this family of problems. The Dynamic Programming approach has been already used for similar problems in cases when it is possible to write explicitly the value function V. Here we deal with cases when the explicit form of V cannot be found, as most often occurs. We carefully describe the basic setting and give some first results on the solution of the Hamilton-Jacobi-Bellman (HJB) equation as a first step to find optimal strategies in closed loop form.

math.OC↗