“…Problem (1.5)-(1.7) finds relevance in numerous applications where the observations are carried out at specific locations. For instance, in the so-called calibration problem with American options [1], in the optimal control of selective cooling of steel [60], in the active control of sound [7,48] and in the active control of vibrations [26,35]; see also [9,10,29,36,53] for other applications. The point observation terms in the cost (1.5), tend to enforce the state y to have the fixed value y z at the point z. Consequently, (1.5)-(1.7) can be understood as a penalty version of a PDE constrained optimization problem where the state is constrained at a collection of points.…”