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We consider optimal stopping problems with finite-time horizon and state-dependent discounting. The underlying process is a one-dimensional linear diffusion and the gain function is time-homogeneous and difference of two convex functions.…

Probability · Mathematics 2022-01-19 Tiziano De Angelis

We investigate constrained optimal control problems for linear stochastic dynamical systems evolving in discrete time. We consider minimization of an expected value cost over a finite horizon. Hard constraints are introduced first, and then…

Optimization and Control · Mathematics 2011-07-07 Eugenio Cinquemani , Mayank Agarwal , Debasish Chatterjee , John Lygeros

We study a single risky financial asset model subject to price impact and transaction cost over an finite time horizon. An investor needs to execute a long position in the asset affecting the price of the asset and possibly incurring in…

Trading and Market Microstructure · Quantitative Finance 2015-03-19 Mauricio Junca

In this paper, we propose a new policy iteration algorithm to compute the value function and the optimal controls of continuous time stochastic control problems. The algorithm relies on successive approximations using linear-quadratic…

Optimization and Control · Mathematics 2024-09-09 Dylan Possamaï , Ludovic Tangpi

In this paper, we study an optimal exit time problem with general running and terminal costs and a target $\mathcal{S}\subset\mathbb{R}^d$ having an inner ball property for a nonlinear control system that satisfies mild controllability…

Optimization and Control · Mathematics 2024-06-11 Piermarco Cannarsa , Marco Mazzola , Khai T. Nguyen

We give a short overview of recent results on a specific class of Markov process: the Piecewise Deterministic Markov Processes (PDMPs). We first recall the definition of these processes and give some general results. On more specific cases…

Statistics Theory · Mathematics 2013-09-25 Romain Azaïs , Jean-Baptiste Bardet , Alexandre Genadot , Nathalie Krell , Pierre-André Zitt

We study an optimal stopping problem with an unbounded, time-dependent and discontinuous reward function. This problem is motivated by the pricing of a variable annuity contract with guaranteed minimum maturity benefit, under the assumption…

Mathematical Finance · Quantitative Finance 2026-03-10 Anne Mackay , Marie-Claude Vachon

This paper studies function approximation for finite horizon discrete time Markov decision processes under certain convexity assumptions. Uniform convergence of these approximations on compact sets is proved under several sampling schemes…

Optimization and Control · Mathematics 2018-02-21 Jeremy Yee

Explicit solution of an infinite horizon optimal stopping problem for a Levy processes with a polynomial reward function is given, in terms of the overall supremum of the process, when the solution of the problem is one-sided. The results…

Probability · Mathematics 2015-07-23 Ernesto Mordecki , Yuliya Mishura

In this paper, we prove that there exists a unique, bounded continuous weak solution to the Dirichlet boundary value problem for a general class of second-order elliptic operators with singular coefficients, which does not necessarily have…

Probability · Mathematics 2009-07-27 Zhen-Qing Chen , Tusheng Zhang

We study causal optimal transport in continuous time, with Markovian cost, between a finite-state Markov source and a diffusion target. By replacing the source with its conditional law given the observation of the target, we characterize…

Optimization and Control · Mathematics 2026-05-20 Julio Backhoff , Erhan Bayraktar , Ibrahim Ekren , Antonios Zitridis

The optimal stopping problem is a category of decision problems with a specific constrained configuration. It is relevant to various real-world applications such as finance and management. To solve the optimal stopping problem,…

Computational Finance · Quantitative Finance 2022-08-02 Leonardo Kanashiro Felizardo , Elia Matsumoto , Emilio Del-Moral-Hernandez

In this paper we present a Learning Model Predictive Control (LMPC) strategy for linear and nonlinear time optimal control problems. Our work builds on existing LMPC methodologies and it guarantees finite time convergence properties for the…

Systems and Control · Electrical Eng. & Systems 2020-10-06 Ugo Rosolia , Francesco Borrelli

This paper is concerned with an optimal stock selling rule under a Markov chain model. The objective is to find an optimal stopping time to sell the stock so as to maximize an expected return. Solutions to the associated variational…

Pricing of Securities · Quantitative Finance 2013-10-01 Qing Zhang

We consider the representation of the value of a class of optimal stopping problems of linear diffusions in a linearized form as an expected supremum of a known function. We establish an explicit integral representation of this representing…

Probability · Mathematics 2017-03-16 Luis H. R. Alvarez E. , Pekka Matomäki

We study optimal stopping of Feller-Markov processes to maximise an undiscounted functional consisting of running and terminal rewards. In a finite-time horizon setting, we extend classical results to unbounded rewards. In infinite horizon,…

Optimization and Control · Mathematics 2016-07-21 Jan Palczewski , Lukasz Stettner

Bayesian optimization is a methodology to optimize black-box functions. Traditionally, it focuses on the setting where you can arbitrarily query the search space. However, many real-life problems do not offer this flexibility; in…

The focus of this article is studying an optimal control problem for branching diffusion processes. Initially, we introduce the problem in its strong formulation and expand it to include linearly growing drifts. Then, we present a relaxed…

Probability · Mathematics 2026-01-21 Antonio Ocello

The value function of an optimal stopping problem for jump diffusions is known to be a generalized solution of a variational inequality. Assuming that the diffusion component of the process is nondegenerate and a mild assumption on the…

Optimization and Control · Mathematics 2012-03-16 Erhan Bayraktar , Hao Xing

In this work, we study discrete-time Markov decision processes (MDPs) under constraints with Borel state and action spaces and where all the performance functions have the same form of the expected total reward (ETR) criterion over the…

Probability · Mathematics 2019-05-10 F. Dufour , Alexandre Genadot