Backward Induction and Optimal Stopping Times Video Tutorial
Backward Induction and Optimal Stopping Times: In the first part of the lecture we wrap up the previous discussion of implied default probabilities, showing how to calculate them quickly by using the same duality trick we used to compute forward interest rates, and showing how to interpret them as spreads in the forward rates. The main part of the lecture focuses on the powerful tool of backward induction, once used in the early 1900s by the mathematician Zermelo to prove the existence of an optimal strategy in chess. We explore its application in a series of optimal stopping problems, starting with examples quite distant from economics such as how to decide when it is time to stop dating and get married. In each case we find that the option to continue is surprisingly valuable.
Please click on the Like button if you liked this video.
Backward Induction and Optimal Stopping Times - Video Lessons, Tutorials, Ebooks
At SchoolTrainer.com, get access to free study material for Economics in the form of video lessons, tutorials and downloadable ebooks. Not only that; you can get Free Homework Help to get solutions to Economics problems you're stuck with.
We also bring to you interesting stuff like text-books and CD's recommended by teachers and other students that you can buy from trusted online stores to get an extra edge to do well in Economics and other subjects.
Need help with Economics? Get an online Economics tutor to help you with and other areas of .
Register for our online Economics tutoring program to get homework help, help with test preparation and learn from experts to perform well in academics. SchoolTrainer specializes in tutoring for Economics. Our highly qualified Economics tutors can help you with Backward Induction and Optimal Stopping Times, other Economics homework problems, test preparation and clarification of concepts.
More Free Study Material
- Algebra 1 Study Material
- Arithmetic Study Material
- Biology (College/University Lectures)
- Biology Study Material
- Calculus Study Material
- Chemistry (College/University Lectures)
- Chemistry Study Material
- Computer Science (College/University Lectures)
- Computer Science Study Material
- Cosmology and Astronomy(College/University Lectures)
- Cryptography
- Developmental Math
- Developmental Math 2 Study Material
- Differential Equations Study Material
- Economics (College/University Lectures) – 2
- Geometry Study Material
- HealthCare and Medicine(College/University lectures)
- History Study Material
- Interest and Debt
- Linear Algebra Study Material
- MIT+K12(College University Lectures)
- Organic Chemistry Study Material
- Physics (College/University Lectures)
- Physics Study Material
- Pre Algebra Study Material
- Pre Calculus Study Material
- Probability Study Material
- Statistics Study Material
- Trigonometry Study Material