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In many reinforcement learning applications, the underlying environment reward and transition functions are explicitly known differentiable functions. This enables us to use recent research which applies machine learning tools to stochastic…

Portfolio Management · Quantitative Finance 2022-04-08 Thibault Jaisson

This paper sets forth a framework for deep reinforcement learning as applied to market making (DRLMM) for cryptocurrencies. Two advanced policy gradient-based algorithms were selected as agents to interact with an environment that…

Trading and Market Microstructure · Quantitative Finance 2019-11-21 Jonathan Sadighian

Many applications -- including power systems, robotics, and economics -- involve a dynamical system interacting with a stochastic and hard-to-model environment. We adopt a reinforcement learning approach to control such systems.…

Optimization and Control · Mathematics 2025-08-26 Abed AlRahman Al Makdah , Oliver Kosut , Lalitha Sankar , Shaofeng Zou

General purpose intelligent learning agents cycle through (complex,non-MDP) sequences of observations, actions, and rewards. On the other hand, reinforcement learning is well-developed for small finite state Markov Decision Processes…

Artificial Intelligence · Computer Science 2009-12-30 Marcus Hutter

Markov Decision Processes (MDPs) are an effective way to formally describe many Machine Learning problems. In fact, recently MDPs have also emerged as a powerful framework to model financial trading tasks. For example, financial MDPs can…

Computational Engineering, Finance, and Science · Computer Science 2021-07-21 Diego Pino , Javier García , Fernando Fernández , Svitlana S Vyetrenko

This thesis presents the results of a comprehensive research project focused on applying Reinforcement Learning (RL) to the problem of market making in financial markets. Market makers (MMs) play a fundamental role in providing liquidity,…

Machine Learning · Computer Science 2025-07-28 Óscar Fernández Vicente

In this paper, we consider reinforcement learning of Markov Decision Processes (MDP) with peak constraints, where an agent chooses a policy to optimize an objective and at the same time satisfy additional constraints. The agent has to take…

Optimization and Control · Mathematics 2019-12-09 Ather Gattami

To overcome the curses of dimensionality and modeling of Dynamic Programming (DP) methods to solve Markov Decision Process (MDP) problems, Reinforcement Learning (RL) methods are adopted in practice. Contrary to traditional RL algorithms…

Machine Learning · Computer Science 2021-08-24 Arghyadip Roy , Vivek Borkar , Abhay Karandikar , Prasanna Chaporkar

This paper proposes a Deep Reinforcement Learning algorithm for financial portfolio trading based on Deep Q-learning. The algorithm is capable of trading high-dimensional portfolios from cross-sectional datasets of any size which may…

Portfolio Management · Quantitative Finance 2021-12-10 Uta Pigorsch , Sebastian Schäfer

We propose using deep reinforcement learning to solve dynamic stochastic general equilibrium models. Agents are represented by deep artificial neural networks and learn to solve their dynamic optimisation problem by interacting with the…

Econometrics · Economics 2023-01-06 Mingli Chen , Andreas Joseph , Michael Kumhof , Xinlei Pan , Xuan Zhou

Reinforcement Learning (RL) applied to financial problems has been the subject of a lively area of research. The use of RL for optimal trading strategies that exploit latent information in the market is, to the best of our knowledge, not…

Trading and Market Microstructure · Quantitative Finance 2025-11-04 Andrea Macrì , Sebastian Jaimungal , Fabrizio Lillo

Standard Markov decision process (MDP) and reinforcement learning algorithms optimize the policy with respect to the expected gain. We propose an algorithm which enables to optimize an alternative objective: the probability that the gain is…

Machine Learning · Computer Science 2023-03-06 Vincent Corlay , Jean-Christophe Sibel

Algorithmic trading, due to its inherent nature, is a difficult problem to tackle; there are too many variables involved in the real world which make it almost impossible to have reliable algorithms for automated stock trading. The lack of…

Artificial Intelligence · Computer Science 2020-01-28 Abhishek Nan , Anandh Perumal , Osmar R. Zaiane

In recent years, a wide range of investment models have been created using artificial intelligence. Automatic trading by artificial intelligence can expand the range of trading methods, such as by conferring the ability to operate 24 hours…

Trading and Market Microstructure · Quantitative Finance 2021-12-17 Koya Ishikawa , Kazuhide Nakata

Many real-world auctions are dynamic processes, in which bidders interact and report information over multiple rounds with the auctioneer. The sequential decision making aspect paired with imperfect information renders analyzing the…

Computer Science and Game Theory · Computer Science 2023-12-21 Vinzenz Thoma , Michael Curry , Niao He , Sven Seuken

The large integration of variable energy resources is expected to shift a large part of the energy exchanges closer to real-time, where more accurate forecasts are available. In this context, the short-term electricity markets and in…

Trading and Market Microstructure · Quantitative Finance 2020-04-14 Ioannis Boukas , Damien Ernst , Thibaut Théate , Adrien Bolland , Alexandre Huynen , Martin Buchwald , Christelle Wynants , Bertrand Cornélusse

In this study, we apply reinforcement learning techniques and propose what we call reinforcement mechanism design to tackle the dynamic pricing problem in sponsored search auctions. In contrast to previous game-theoretical approaches that…

Computer Science and Game Theory · Computer Science 2017-11-29 Weiran Shen , Binghui Peng , Hanpeng Liu , Michael Zhang , Ruohan Qian , Yan Hong , Zhi Guo , Zongyao Ding , Pengjun Lu , Pingzhong Tang

Reinforcement learning (RL) often necessitates a meticulous Markov Decision Process (MDP) design tailored to each task. This work aims to address this challenge by proposing a systematic approach to behavior synthesis and control for…

Robotics · Computer Science 2024-10-18 Jean-Pierre Sleiman , Mayank Mittal , Marco Hutter

This study develops a robot mobility policy based on deep reinforcement learning. Since traditional methods of conventional robotic navigation depend on accurate map reproduction as well as require high-end sensors, learning-based methods…

Robotics · Computer Science 2020-12-22 Minh Q. Tran , Ngoc Q. Ly

Portfolio management is a fundamental problem in finance. It involves periodic reallocations of assets to maximize the expected returns within an appropriate level of risk exposure. Deep reinforcement learning (RL) has been considered a…

Computational Finance · Quantitative Finance 2022-10-05 Hui Niu , Siyuan Li , Jian Li