Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: Optimal dividends with partial information and stopping of a degenerate
  reflecting diffusion   We study the optimal dividend problem for a firm's manager who has partial
information on the profitability of the firm. The problem is formulated as one
of singular stochastic control with partial information on the drift of the
underlying process and with absorption. In the Markovian formulation, we have a
2-dimensional degenerate diffusion, whose first component is singularly
controlled and it is absorbed as it hits zero. The free boundary problem (FBP)
associated to the value function of the control problem is challenging from the
analytical point of view due to the interplay of degeneracy and absorption. We
find a probabilistic way to show that the value function of the dividend
problem is a smooth solution of the FBP and to construct an optimal dividend
strategy. Our approach establishes a new link between multidimensional singular
stochastic control problems with absorption and problems of optimal stopping
with `creation'. One key feature of the stopping problem is that creation
occurs at a state-dependent rate of the `local-time' of an auxiliary
2-dimensional reflecting diffusion.

16
The categories of this paper are: stat
23
The categories of this paper are: solv-int
11
The categories of this paper are: hep-lat
32
The categories of this paper are: atom-ph
25
The categories of this paper are: patt-sol
6
The categories of this paper are: astro-ph
8
The categories of this paper are: hep-ex
36
The categories of this paper are: cmp-lg
31
The categories of this paper are: ao-sci
15
The categories of this paper are: nucl-ex
12
The categories of this paper are: nucl-th
20
The categories of this paper are: acc-phys
9
The categories of this paper are: nlin
7
The categories of this paper are: hep-th
26
The categories of this paper are: bayes-an
13
The categories of this paper are: quant-ph