Special Session 182: Recent developments on mathematical finance, stochastic control and related topics

Distribution constrained optimal stopping: beyond the Root-type solution
Shuoqing Deng
The Hong Kong University of Science and Science and Technology
Hong Kong
Co-Author(s):    Shuoqing Deng
Abstract:
We give an explicit construction of the boundary which solves the distribution constrained optimal stopping when the cost function is not of Root-type. The boundary can be characterised analytically and probabilistically. From the analytical perspective, it is characterised by the viscosity solution of a variational inequality with Wentzell type boundary condition. From the probabilistic perspective, it can be characterised by the backward optimal stopping of a Sticky Brwonian motion without distribution constraint.