Special Session 182: Recent developments on mathematical finance, stochastic control and related topics

Well-posedness of the equilibrium HJB system for time-inconsistent controls
Zhenhua Wang
Shandong University
Peoples Rep of China
Co-Author(s):    Xiang Yu, Jiengjie Zhang, Zhou Zhou
Abstract:
We provide a general framework to solve equilibrium HJB equation system for time-inconsistent control problems by entropy-regularization. The controlled process is given by a SDE with no control on the diffusion term. We show the existence of solution/equilibrium with positive entropy weight, then prove the existence of relaxed equilibrium to the original time-inconsistent control by vanishing the entropy weight. This talk is based on joint works with Xiang Yu, Jingjie Zhang and Zhou Zhou.