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This paper introduces a new type of risk measures, namely regime switching entropic risk measures, and study their applicability through simulations. The state of the economy is incorporated into the entropic risk formulation by using a…

Risk Management · Quantitative Finance 2021-12-28 Babacar Seck , Robert J. Elliott

This paper concerns discrete-time infinite-horizon stochastic control systems with Borel state and action spaces and universally measurable policies. We study optimization problems on strategic measures induced by the policies in these…

Optimization and Control · Mathematics 2023-12-22 Huizhen Yu

There are no computationally feasible algorithms that provide solutions to the finite horizon Risk-sensitive Constrained Markov Decision Process (Risk-CMDP) problem, even for problems with moderate horizon. With an aim to design the same,…

Optimization and Control · Mathematics 2023-03-27 Vartika Singh , Veeraruna Kavitha

This work studies discrete-time discounted Markov decision processes with continuous state and action spaces and addresses the inverse problem of inferring a cost function from observed optimal behavior. We first consider the case in which…

Optimization and Control · Mathematics 2024-05-27 Angeliki Kamoutsi , Peter Schmitt-Förster , Tobias Sutter , Volkan Cevher , John Lygeros

The paper addresses the problem of computing maximal conditional expected accumulated rewards until reaching a target state (briefly called maximal conditional expectations) in finite-state Markov decision processes where the condition is…

Logic in Computer Science · Computer Science 2023-03-07 Christel Baier , Joachim Klein , Sascha Klüppelholz , Sascha Wunderlich

In this paper, we consider a continuous-time Markov decision process (CTMDP) in Borel spaces, where the certainty equivalent with respect to the exponential utility of the total undiscounted cost is to be minimized. The cost rate is…

Optimization and Control · Mathematics 2016-11-29 Yi Zhang

In recent years probabilistic model checking has become an important area of research because of the diffusion of computational systems of stochastic nature. Despite its great success, standard probabilistic model checking suffers the…

Logic in Computer Science · Computer Science 2021-05-19 Alberto Termine , Alessandro Antonucci , Alessandro Facchini , Giuseppe Primiero

In stochastic dynamic environments, team Markov games have emerged as a versatile paradigm for studying sequential decision-making problems of fully cooperative multi-agent systems. However, the optimality of the derived policies is usually…

Optimization and Control · Mathematics 2022-05-03 Feng Huang , Ming Cao , Long Wang

This article presents a short and concise description of stochastic approximation algorithms in reinforcement learning of Markov decision processes. The algorithms can also be used as a suboptimal method for partially observed Markov…

Optimization and Control · Mathematics 2015-12-25 Vikram Krishnamurthy

In classical Markov Decision Processes (MDPs), action costs and transition probabilities are assumed to be known, although an accurate estimation of these parameters is often not possible in practice. This study addresses MDPs under cost…

Optimization and Control · Mathematics 2019-06-24 Merve Merakli , Simge Kucukyavuz

This paper deals with unconstrained discounted continuous-time Markov decision processes in Borel state and action spaces. Under some conditions imposed on the primitives, allowing unbounded transition rates and unbounded (from both above…

Optimization and Control · Mathematics 2011-03-02 Alexey Piunovskiy , Yi Zhang

In multi-period stochastic optimization problems, the future optimal decision is a random variable whose distribution depends on the parameters of the optimization problem. We analyze how the expected value of this random variable changes…

Optimization and Control · Mathematics 2020-01-28 Bar Light

Classical game-theoretic approaches for multi-agent systems in both the forward policy design problem and the inverse reward learning problem often make strong rationality assumptions: agents perfectly maximize expected utilities under…

Machine Learning · Computer Science 2021-03-23 Ran Tian , Liting Sun , Masayoshi Tomizuka

Motivated by many application problems, we consider Markov decision processes (MDPs) with a general loss function and unknown parameters. To mitigate the epistemic uncertainty associated with unknown parameters, we take a Bayesian approach…

Machine Learning · Computer Science 2025-10-02 Xiaoshuang Wang , Yifan Lin , Enlu Zhou

This article presents a constrained policy optimization approach for the optimal control of systems under nonstationary uncertainties. We introduce an assumption that we call Markov embeddability that allows us to cast the stochastic…

Optimization and Control · Mathematics 2026-05-11 Sungho Shin , François Pacaud , Emil Contantinescu , Mihai Anitescu

We develop a model for credit rating migration that accounts for the impact of economic state fluctuations on default probabilities. The joint process for the economic state and the rating is modelled as a time-homogeneous Markov chain.…

Risk Management · Quantitative Finance 2024-03-25 Michael Kalkbrener , Natalie Packham

We study a Markov decision problem in which the state space is the set of finite marked point configurations in the plane, the actions represent thinnings, the reward is proportional to the mark sum which is discounted over time, and the…

Probability · Mathematics 2023-09-08 M. N. M. van Lieshout

Markov reward processes (MRPs) are used to model stochastic phenomena arising in operations research, control engineering, robotics, and artificial intelligence, as well as communication and transportation networks. In many of these cases,…

Machine Learning · Statistics 2020-09-17 Ashwin Pananjady , Martin J. Wainwright

Markov processes are used in a wide range of disciplines, including finance. The transition densities of these processes are often unknown. However, the conditional characteristic functions are more likely to be available, especially for…

Statistics Theory · Mathematics 2013-02-04 Song X. Chen , Liang Peng , Cindy L. Yu

We propose policy gradient algorithms for solving a risk-sensitive reinforcement learning (RL) problem in on-policy as well as off-policy settings. We consider episodic Markov decision processes, and model the risk using the broad class of…

Machine Learning · Computer Science 2024-06-25 Nithia Vijayan , Prashanth L. A