Multilevel Monte Carlo method with applications to stochastic partial differential equations


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Date

2012

Publication Type

Journal Article

ETH Bibliography

yes

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Abstract

In this work, the approximation of Hilbert-space-valued random variables is combined with the approximation of the expectation by a multilevel Monte Carlo (MLMC) method. The number of samples on the different levels of the multilevel approximation are chosen such that the errors are balanced. The overall work then decreases in the optimal case to $O(h^-$$^2)$ if $h$ is the error of the approximation. The MLMC method is applied to functions of solutions of parabolic and hyperbolic stochastic partial differential equations as needed, for example, for option pricing. Simulations complete the paper.

Publication status

published

Editor

Book title

Volume

89 (18)

Pages / Article No.

2479 - 2498

Publisher

Taylor & Francis

Event

Edition / version

Methods

Software

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Date collected

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Subject

Multilevel Monte Carlo; Stochastic partial differential equations; Stochastic finite element methods; Stochastic parabolic equation; Stochastic hyperbolic equation; Multilevel approximations

Organisational unit

03435 - Schwab, Christoph / Schwab, Christoph check_circle

Notes

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