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This paper extends the optimal-trading framework developed in arXiv:2409.03586v1 to compute optimal strategies with real-world constraints. The aim of the current paper, as with the previous, is to study trading in the context of…

Trading and Market Microstructure · Quantitative Finance 2024-09-26 Neil A. Chriss

This work presents and analyzes space-time finite element methods on fully unstructured simplicial space-time meshes for the numerical solution of parabolic optimal control problems. Using Babu\v{s}ka's theorem, we show well-posedness of…

Numerical Analysis · Mathematics 2020-04-07 Ulrich Langer , Olaf Steinbach , Fredi Tröltzsch , Huidong Yang

In this paper we study a parabolic version of the fractional obstacle problem, proving almost optimal regularity for the solution. This problem is motivated by an American option model proposed by Menton which introduces, into the theory of…

Analysis of PDEs · Mathematics 2011-01-28 Luis Caffarelli , Alessio Figalli

This paper develops a new methodology for studying continuous-time Nash equilibrium in a financial market with asymmetrically informed agents. This approach allows us to lift the restriction of risk neutrality imposed on market makers by…

Probability · Mathematics 2016-09-05 Umut Çetin , Albina Danilova

This paper investigates the optimal choices of financial derivatives to complete a financial market in the framework of stochastic volatility (SV) models. We introduce an efficient and accurate simulation-based method, applicable to…

Portfolio Management · Quantitative Finance 2022-02-17 Matt Davison , Marcos Escobar-Anel , Yichen Zhu

This paper includes an original self contained proof of well-posedness of an initial-boundary value problem involving a non-local parabolic PDE which naturally arises in the study of derivative pricing in a generalized market model. We call…

Mathematical Finance · Quantitative Finance 2014-08-25 Anindya Goswami , Jeeten Patel , Poorva Sevgaonkar

A new method is proposed to improve the numeri- cal simulation of time dependent problems when the initial and boundary data are not compatible. Unlike earlier methods limited to space dimension one, this method can be used for any space…

Numerical Analysis · Mathematics 2010-11-23 Qingshan Chen , Zhen Qin , Roger Temam

Systems of parabolic, possibly degenerate parabolic SPDEs are considered. Existence and uniqueness are established in Sobolev spaces. Similar results are obtained for a class of equations generalizing the deterministic first order symmetric…

Analysis of PDEs · Mathematics 2019-03-14 Máté Gerencsér , István Gyöngy , Nicolai Krylov

We apply the Monte Carlo method to solving the Dirichlet problem of linear parabolic equations with fractional Laplacian. This method exploit- s the idea of weak approximation of related stochastic differential equations driven by the…

Numerical Analysis · Mathematics 2022-10-28 Caiyu Jiao , Changpin Li

We present a branch-and-bound algorithm for globally solving parabolic optimal control problems with binary switches that have bounded variation and possibly need to satisfy further combinatorial constraints. More precisely, for a given…

Optimization and Control · Mathematics 2024-01-19 Christoph Buchheim , Alexandra Grütering , Christian Meyer

In this paper, we are concerned with the problem of determining the existence of multiple equilibria in economic models. We propose a general and complete approach for identifying multiplicities of equilibria in semi-algebraic economies,…

Symbolic Computation · Computer Science 2013-08-26 Xiaoliang Li , Dongming Wang

This paper aims to develop and analyze a numerical scheme for solving the backward problem of semilinear subdiffusion equations. We establish the existence, uniqueness, and conditional stability of the solution to the inverse problem by…

Numerical Analysis · Mathematics 2025-05-07 Xu Wu , Jiang Yang , Zhi Zhou

A linearized numerical scheme is proposed to solve the nonlinear time fractional parabolic problems with time delay. The scheme is based on the standard Galerkin finite element method in the spatial direction, the fractional Crank-Nicolson…

Numerical Analysis · Mathematics 2021-09-10 Lili Li , Mianfu She , Yuanling Niu

This work is concerned with the identification problem for what we call the perturbation term or error term in a parabolic partial differential equation, through its approximate periodic solutions. The observation is made over a subregion…

Optimization and Control · Mathematics 2007-05-23 Ling Lei

We propose a novel numerical inversion algorithm for the coefficients of parabolic partial differential equations, based on model reduction. The study is motivated by the application of controlled source electromagnetic exploration, where…

Numerical Analysis · Mathematics 2014-11-21 Liliana Borcea , Vladimir Druskin , Alexander V. Mamonov , Mikhail Zaslavsky

In this paper we present the solution to the problem of recovering rather arbitrary integral operator based on incomplete information with error. We apply the main result to obtain optimal methods of recovery and compute the optimal error…

Analysis of PDEs · Mathematics 2015-09-16 Vladyslav Babenko , Yuliya Babenko , Nataliia Parfinovych , Dmytro Skorokhodov

We consider the numerical approximation of the quantile hedging price in a non-linear market. In a Markovian framework, we propose a numerical method based on a Piecewise Constant Policy Timestepping (PCPT) scheme coupled with a monotone…

Computational Finance · Quantitative Finance 2021-02-17 Cyril Bénézet , Jean-François Chassagneux , Christoph Reisinger

We consider a distributed optimal control problem subject to a parabolic evolution equation as constraint. The control will be considered in the energy norm of the anisotropic Sobolev space $[H_{0;,0}^{1,1/2}(Q)]^\ast$, such that the state…

Numerical Analysis · Mathematics 2025-02-14 Richard Löscher , Michael Reichelt , Olaf Steinbach

We consider de Finetti's problem for spectrally one-sided L\'evy risk models with control strategies that are absolutely continuous with respect to the Lebesgue measure. Furthermore, we consider the version with a constraint on the time of…

Optimization and Control · Mathematics 2026-01-14 Mauricio Junca , Harold Moreno-Franco , José-Luis Pérez , Kazutoshi Yamazaki

We exhibit a numerical method to solve fractional variational problems, applying a decomposition formula based on Jacobi polynomials. Formulas for the fractional derivative and fractional integral of the Jacobi polynomials are proven. By…

Numerical Analysis · Mathematics 2015-12-08 Hassan Khosravian-Arab , Ricardo Almeida