This paper presents an application of mean field control to dynamic production optimization with sticky prices and adjustment costs. Both noncooperative and cooperative solutions are considered. By solving auxiliary limiting optimal control problems subject to consistent mean field approximations, two sets of decentralized strategies are obtained and further shown to asymptotically attain Nash equilibria and social optima, respectively. A numerical example is given to compare market prices, firms’ outputs and costs under the two solution frameworks.

Additional Metadata
Keywords Mean field game, Nash equilibrium, Production output adjustment, Social optimum, Sticky price
Persistent URL dx.doi.org/10.1016/j.automatica.2018.11.006
Journal Automatica
Citation
Wang, B. (Bingchang), & Huang, M. (2019). Mean field production output control with sticky prices: Nash and social solutions. Automatica, 100, 90–98. doi:10.1016/j.automatica.2018.11.006