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We develop a new Monte Carlo variance reduction method to estimate the expectation of two commonly encountered path-dependent functionals: first-passage times and occupation times of sets. The method is based on a recursive approximation of…

Probability · Mathematics 2014-10-28 Aleksandar Mijatovic , Martijn Pistorius , Johannes Stolte

We study a Monte Carlo algorithm for simulation of probability distributions based on stochastic step functions, and compare to the traditional Metropolis/Hastings method. Unlike the latter, the step function algorithm can produce an…

Probability · Mathematics 2015-12-07 Torquil Macdonald Sørensen , Fred Espen Benth

We propose a novel estimation framework for path-dependent functionals of Levy processes from discretely observed data. Traditional approaches rely on Monte Carlo simulation of full paths, which requires complete model specification and…

Methodology · Statistics 2025-09-03 Yasutaka Shimizu , Hiroshi Shiraishi

Models of stochastic processes are widely used in almost all fields of science. Theory validation, parameter estimation, and prediction all require model calibration and statistical inference using data. However, data are almost always…

Computation · Statistics 2022-09-07 David J. Warne , Thomas P. Prescott , Ruth E. Baker , Matthew J. Simpson

Analogue to the well-known Langevin Monte Carlo method, in this article we provide a method to sample from a target distribution \(\pi\) by simulating a solution of a stochastic differential equation. Hereby, the stochastic differential…

Probability · Mathematics 2023-03-15 David Oechsler

This paper focuses on the study of an original combination of the Multilevel Monte Carlo method introduced by Giles [10] and the popular importance sampling technique. To compute the optimal choice of the parameter involved in the…

Probability · Mathematics 2017-09-05 Mohamed Ben Alaya , Kaouther Hajji , Ahmed Kebaier

In solving simulation-based stochastic root-finding or optimization problems that involve rare events, such as in extreme quantile estimation, running crude Monte Carlo can be prohibitively inefficient. To address this issue, importance…

Methodology · Statistics 2021-02-23 Shengyi He , Guangxin Jiang , Henry Lam , Michael C. Fu

The aim of this paper is to introduce a new Monte Carlo method based on importance sampling techniques for the simulation of stochastic differential equations. The main idea is to combine random walk on squares or rectangles methods with…

Probability · Mathematics 2010-10-22 Madalina Deaconu , Antoine Lejay

This paper studies multi-level stochastic approximation algorithms. Our aim is to extend the scope of the multilevel Monte Carlo method recently introduced by Giles (Giles 2008) to the framework of stochastic optimization by means of…

Probability · Mathematics 2014-08-12 Noufel Frikha

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

Adaptive Monte Carlo methods are recent variance reduction techniques. In this work, we propose a mathematical setting which greatly relaxes the assumptions needed by for the adaptive importance sampling techniques presented by Vazquez-Abad…

Computational Finance · Quantitative Finance 2011-04-28 Bernard Lapeyre , Jérôme Lelong

We develop a novel Monte Carlo algorithm for the vector consisting of the supremum, the time at which the supremum is attained and the position at a given (constant) time of an exponentially tempered L\'evy process. The algorithm, based on…

Mathematical Finance · Quantitative Finance 2023-11-20 Jorge Ignacio González Cázares , Aleksandar Mijatović

High-dimensional count data poses significant challenges for statistical analysis, necessitating effective methods that also preserve explainability. We focus on a low rank constrained variant of the Poisson log-normal model, which relates…

Optimization and Control · Mathematics 2025-06-17 Bastien Batardière , Julien Chiquet , Joon Kwon , Julien Stoehr

Many random processes can be simulated as the output of a deterministic model accepting random inputs. Such a model usually describes a complex mathematical or physical stochastic system and the randomness is introduced in the input…

Machine Learning · Statistics 2012-11-21 A. Gokcen Mahmutoglu , Alper T. Erdogan , Alper Demir

Variational inference approximates the posterior distribution of a probabilistic model with a parameterized density by maximizing a lower bound for the model evidence. Modern solutions fit a flexible approximation with stochastic gradient…

Machine Learning · Statistics 2017-07-13 Joseph Sakaya , Arto Klami

Monte Carlo and Quasi-Monte Carlo methods present a convenient approach for approximating the expected value of a random variable. Algorithms exist to adaptively sample the random variable until a user defined absolute error tolerance is…

Numerical Analysis · Mathematics 2023-11-14 Aleksei G. Sorokin , Jagadeeswaran Rathinavel

Quantum mechanics for many-body systems may be reduced to the evaluation of integrals in 3N dimensions using Monte-Carlo, providing the Quantum Monte Carlo ab initio methods. Here we limit ourselves to expectation values for trial…

Computational Physics · Physics 2010-11-22 John Robert Trail , Ryo Maezono

We consider the numerical approximation of $\mathbb{P}[G\in \Omega]$ where the $d$-dimensional random variable $G$ cannot be sampled directly, but there is a hierarchy of increasingly accurate approximations $\{G_\ell\}_{\ell\in\mathbb{N}}$…

Computational Finance · Quantitative Finance 2021-07-21 Abdul-Lateef Haji-Ali , Jonathan Spence , Aretha Teckentrup

We describe an adaptive importance sampling algorithm for rare events that is based on a dual stochastic control formulation of a path sampling problem. Specifically, we focus on path functionals that have the form of cumulate generating…

Dynamical Systems · Mathematics 2019-01-30 Omar Kebiri , Lara Neureither , Carsten Hartmann

This paper develops a novel weak multilevel Monte-Carlo (MLMC) approximation scheme for L\'evy-driven Stochastic Differential Equations (SDEs). The scheme is based on the state space discretization (via a continuous-time Markov chain…

Computational Finance · Quantitative Finance 2026-01-21 Aleksandar Mijatović , Romain Palfray