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We explore a stochastic model that enables capturing external influences in two specific ways. The model allows for the expression of uncertainty in the parametrisation of the stochastic dynamics and incorporates patterns to account for…

Pricing of Securities · Quantitative Finance 2024-04-11 Felix L. Wolf , Griselda Deelstra , Lech A. Grzelak

In this paper, we consider a network capacity expansion problem in the context of telecommunication networks, where there is uncertainty associated with the expected traffic demand. We employ a distributionally robust stochastic…

Optimization and Control · Mathematics 2020-04-10 Trivikram Dokka , Francis Garuba , Marc Goerigk , Peter Jacko

Scenario reduction algorithms can be an effective means to provide a tractable description of the uncertainty in optimal control problems. However, they might significantly compromise the performance of the controlled system. In this paper,…

Optimization and Control · Mathematics 2024-04-12 Francesco Cordiano , Bart De Schutter

In robust optimization, the general aim is to find a solution that performs well over a set of possible parameter outcomes, the so-called uncertainty set. In this paper, we assume that the uncertainty size is not fixed, and instead aim at…

Optimization and Control · Mathematics 2016-06-24 André Chassein , Marc Goerigk

This contribution examines optimization problems that involve stochastic dominance constraints. These problems have uncountably many constraints. We develop methods to solve the optimization problem by reducing the constraints to a finite…

Optimization and Control · Mathematics 2025-02-27 Rajmadan Lakshmanan , Alois Pichler , Miloš Kopa

We consider stochastic programs conditional on some covariate information, where the only knowledge of the possible relationship between the uncertain parameters and the covariates is reduced to a finite data sample of their joint…

Optimization and Control · Mathematics 2021-11-23 Adrián Esteban-Pérez , Juan M. Morales

The main goal of this paper is to discuss the construction of distributionally robust counterparts of stochastic optimal control problems. Randomized and non-randomized policies are considered. In particular, necessary and sufficient…

Optimization and Control · Mathematics 2024-10-15 Alexander Shapiro , Yan Li

Robust optimization is a framework for modeling optimization problems involving data uncertainty and during the last decades has been an area of active research. If we focus on linear programming (LP) problems with i) uncertain data, ii)…

Numerical Analysis · Computer Science 2017-02-15 Roberto Mínguez , Víctor Casero-Alonso

We study the expected utility portfolio optimization problem in an incomplete financial market where the risky asset dynamics depend on stochastic factors and the portfolio allocation is constrained to lie within a given convex set. We…

Portfolio Management · Quantitative Finance 2023-03-20 Marcos Escobar-Anel , Michel Kschonnek , Rudi Zagst

This paper proposes distributed algorithms to solve robust convex optimization (RCO) when the constraints are affected by nonlinear uncertainty. We adopt a scenario approach by randomly sampling the uncertainty set. To facilitate the…

Distributed, Parallel, and Cluster Computing · Computer Science 2018-01-16 Keyou You , Roberto Tempo , Pei Xie

We propose a stochastic approximation method for approximating the efficient frontier of chance-constrained nonlinear programs. Our approach is based on a bi-objective viewpoint of chance-constrained programs that seeks solutions on the…

Optimization and Control · Mathematics 2020-05-29 Rohit Kannan , James Luedtke

Robustness of linear systems with constant coefficients is considered. There exist methods and tools for analyzing the stability of systems with random or deterministic uncertainties. At the same time, there are no approaches for the…

Optimization and Control · Mathematics 2020-12-08 Andrey Tremba

In practical optimization problems, we typically model uncertainty as a random variable though its true probability distribution is unobservable to the decision maker. Historical data provides some information of this distribution that we…

Optimization and Control · Mathematics 2025-01-28 Arjun Ramachandra , Napat Rujeerapaiboon , Melvyn Sim

We study two-stage stochastic optimization problems with random recourse, where the adaptive decisions are multiplied with the uncertain parameters in both the objective function and the constraints. To mitigate the computational…

Optimization and Control · Mathematics 2021-10-05 Xiangyi Fan , Grani A. Hanasusanto

It is nowadays widely acknowledged that optimal structural design should be robust with respect to the uncertainties in loads and material parameters. However, there are several alternatives to consider such uncertainties in structural…

Computational Engineering, Finance, and Science · Computer Science 2022-01-26 Gustavo Assis da Silva , Eduardo Lenz Cardoso , Andre T. Beck

In this paper, we present a unified framework for decision making under uncertainty. Our framework is based on the composite of two risk measures, where the inner risk measure accounts for the risk of decision given the exact distribution…

Optimization and Control · Mathematics 2015-01-07 Pengyu Qian , Zizhuo Wang , Zaiwen Wen

We revisit Markowitz's mean-variance portfolio selection model by considering a distributionally robust version, where the region of distributional uncertainty is around the empirical measure and the discrepancy between probability measures…

Methodology · Statistics 2018-02-15 Jose Blanchet , Lin Chen , Xun Yu Zhou

This paper studies the properties of the optimal portfolio-consumption strategies in a {finite horizon} robust utility maximization framework with different borrowing and lending rates. In particular, we allow for constraints on both…

Portfolio Management · Quantitative Finance 2018-12-06 Zhou Yang , Gechun Liang , Chao Zhou

This paper studies an optimal investing problem for a retiree facing longevity risk and living standard risk. We formulate the investing problem as a portfolio choice problem under a time-varying risk capacity constraint. We derive the…

Portfolio Management · Quantitative Finance 2022-02-16 Weidong Tian , Zimu Zhu

In robust optimization, we would like to find a solution that is immunized against all scenarios that are modeled in an uncertainty set. Which scenarios to include in such a set is therefore of central importance for the tractability of the…

Optimization and Control · Mathematics 2024-10-14 Jamie Fairbrother , Marc Goerigk , Mohammad Khosravi
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