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Special Semester on Stochastics with Emphasis on Finance
Linz, September 2008 - December 2008
Presentation: A Semigroup Approach for Weak Approximations with an Application to Infinite Activity Lévy Driven SDEs

Workshop: Computational Methods with Applications in Finance, Insurance and the Life Sciences AND Stochastic Methods in Partial Differential Equations and Applications of Deterministic and Stochastic PDEs

Time: Thu, November 20, 2008, 09:30-10:20

Speaker: Arturo Kohatsu-Higa

Abstract

Weak approximations have been developed to calculate the expectation value of functionals of stochastic differential equations, and various numerical discretization schemes (Euler, Milshtein) have been studied by many authors.
We present a general framework based on semigroup expansions for the construction of higher order discretization schemes and analyze its rate of convergence. We also apply it to approximate general Lévy driven stochastic differential equations. This is joint work with Hideyuki Tanaka (Mitsubishi UFJ Trust Investment Technology Institute Co., Ltd.)
Mathematics Subject Classification: 60H35;60J75;65C05
Keywords: stochastic differential equations, jump processes, weak approximation

Presentation slides (pdf, 211 KB)

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