PARAMETRIC CONTINUITY IN DYNAMIC-PROGRAMMING PROBLEMS

We examine conditions under which the solutions to parametric families of dynamic programming problems are continuous in the parameters. Our main results are that parametric continuity obtains whenever either ( a) the family of dynamic programming problems satisfies strong (joint- ) continuity properties in the parameter and state or (b) if it satisf ies weaker (separate-) continuity requirements, provided these are sup plemented by either stronger assumptions on the transition probabiliti es or by monotonicity restrictions such as are common in economic mode lling. The usefulness of our results is illustrated by applying them t o some commonly used dynamic economic models.