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Optimal stopping problem of an Ornstein-Uhlenbeck bridge

Description:

This function computes the Optimal Stopping Boundary Boundary (OSB) that maximizes the mean of an Ornstein-Uhlenbeck Bridge (OUB)

Details:

A Picard's iteration algorithm is implemented to solve the free-boundary equation that characterizes the OSB. Details can be found in the companion paper Optimal Stopping of an Ornstein-Uhlenbeck bridge, by D'Auria, B., García-Portugués E., and Guada A.

Scripts:

  • 1-Functions_OSB.R: Computes the OSB related to the OUB
  • 2-Figures.R: Run illustrative cases

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Computes the optimal stopping boundary that maximazes the mean of an Ornstein-Uhlenbeck bridge

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