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In this paper we consider a reduced-form intensity-based credit risk model with a hidden Markov state process. A filtering method is proposed for extracting the underlying state given the observation processes. The method may be applied to…

Computational Finance · Quantitative Finance 2016-03-10 Feng-Hui Yu , Wai-Ki Ching , Jia-Wen Gu , Tak-Kuen Siu

We study K-processes, which are Markov processes in a denumerable state space, all of whose elements are stable, with the exception of a single state, starting from which the process enters finite sets of stable states with uniform…

Probability · Mathematics 2008-08-27 L. R. G. Fontes , P. Mathieu

The hitting and mixing times are two fundamental quantities associated with Markov chains. In Peres and Sousi[PS2015] and Oliveira[Oli2012], the authors show that the mixing times and "worst-case" hitting times of reversible Markov chains…

Probability · Mathematics 2019-04-05 Robert M. Anderson , Haosui Duanmu , Aaron Smith

Density-dependent Markov chains form an important class of continuous-time Markov chains in population dynamics. On any fixed time window [0, T ], when the scale parameter K > 0 is large such chains are well approximated by the solution of…

Probability · Mathematics 2020-12-14 Adrien Prodhomme

Motivated by a risk process with positive and negative premium rates, we consider a real-valued Markov additive process with finitely many background states. This additive process linearly increases or decreases while the background state…

Probability · Mathematics 2008-08-21 Masakiyo Miyazawa

The study of time-inhomogeneous Markov jump processes is a traditional topic within probability theory that has recently attracted substantial attention in various applications. However, their flexibility also incurs a substantial…

Probability · Mathematics 2023-11-03 Martin Bladt , Oscar Peralta

This paper presents a nonparametric method for estimating the conditional density associated to the jump rate of a piecewise-deterministic Markov process. In our framework, the estimation needs only one observation of the process within a…

Statistics Theory · Mathematics 2012-07-12 Romain Azaïs , François Dufour , Anne Gégout-Petit

We consider the problem of bounding mean first passage times for a class of continuous-time Markov chains that captures stochastic interactions between groups of identical agents. The quantitative analysis of such probabilistic population…

Systems and Control · Electrical Eng. & Systems 2020-04-07 Michael Backenköhler , Luca Bortolussi , Verena Wolf

Drawdown (resp. drawup) of a stochastic process, also referred as the reflected process at its supremum (resp. infimum), has wide applications in many areas including financial risk management, actuarial mathematics and statistics. In this…

Mathematical Finance · Quantitative Finance 2017-06-27 David Landriault , Bin Li , Hongzhong Zhang

Piecewise-deterministic Markov processes form a general class of non-diffusion stochastic models that involve both deterministic trajectories and random jumps at random times. In this paper, we state a new characterization of the jump rate…

Methodology · Statistics 2017-05-03 Romain Azaïs , Alexandre Genadot

Tau leap schemes were originally designed for the efficient time stepping of discrete state and continuous in time Markov processes arising in stochastic chemical kinetics. Previous convergence results on tau leaping schemes have been…

Numerical Analysis · Mathematics 2015-12-09 Muruhan Rathinam

Consider a one dimensional diffusion process on the diffusion interval $I$ originated in $x_0\in I$. Let $a(t)$ and $b(t)$ be two continuous functions of $t$, $t>t_0$ with bounded derivatives and with $a(t)<b(t)$ and $a(t),b(t)\in I$,…

Probability · Mathematics 2014-03-10 Laura Sacerdote , Ottavia Telve , Cristina Zucca

The estimation of absorption time distributions of Markov jump processes is an important task in various branches of statistics and applied probability. While the time-homogeneous case is classic, the time-inhomogeneous case has recently…

Statistics Theory · Mathematics 2022-07-26 Jamaal Ahmad , Martin Bladt , Mogens Bladt

A possibly time-dependent transition intensity matrix or generator $(Q(t))$ characterizes the law of a Markov jump process (MP). For a time homogeneous MP, the transition probability matrix (TPM) can be expressed as a matrix exponential of…

Methodology · Statistics 2025-07-23 Dario Gasbarra , Sangita Kulathinal , Etienne Sebag

We describe a new construction of a family of measures on a group with the same Poisson boundary. Our approach is based on applying Markov stopping times to an extension of the original random walk.

Probability · Mathematics 2012-09-20 Behrang Forghani

Let {X_n,n\geq0} be a Markov chain on a general state space X with transition probability P and stationary probability \pi. Suppose an additive component S_n takes values in the real line R and is adjoined to the chain such that…

Probability · Mathematics 2016-09-07 Cheng-Der Fuh

In this paper, we are interested in the exact simulation of a class of Piecewise Deterministic Markov Processes (PDMP). We show how to perform efficient thinning algorithms depending on the jump rate bound. For different types of jump rate…

Probability · Mathematics 2022-02-10 Vincent Lemaire , Michèle Thieullen , Nicolas Thomas

Let $(X_t)_{t\ge0}$ be a continuous-time, time-homogeneous strong Markov process with possible jumps and let $\tau$ be its first hitting time of a Borel subset of the state space. Suppose $X$ is sampled at random times and suppose also that…

Probability · Mathematics 2008-12-02 Xin Guo , Yan Zeng

This paper considers the tail asymptotics for a cumulative process $\{B(t); t \ge 0\}$ sampled at a heavy-tailed random time $T$. The main contribution of this paper is to establish several sufficient conditions for the asymptotic equality…

Probability · Mathematics 2013-12-30 Hiroyuki Masuyama

We consider a Markovian jumping process with two absorbing barriers, for which the waiting-time distribution involves a position-dependent coefficient. We solve the Fokker-Planck equation with boundary conditions and calculate the mean…

Statistical Mechanics · Physics 2007-10-16 A. Kamińska , T. Srokowski