Stochastic modelling

art and science

Research output: Contribution to journalArticle

Abstract

The purpose of this paper is to outline an approach to stochastic modelling, based on explicit hypotheses formulation and the application of elementary probability rules to determine corresponding stochastic processes. Applications including the Poisson process, the random walk hypothesis for stock market prices and other problems are outlined and referred to. Emphasis is given to model construction and not to its analysis. Through the examples treated several approaches to stochastic modelling analysis are highlighted, which are mostly used in stochastic modelling courses in industrial, business and engineering schools. Throughout the paper, it is stressed that, although stochastic modelling and analysis is a science, it is also an art, for it requires that we distinguish the known from the unknown and construct models that account for behaviours and evolutions which we might not, a priori, be aware of.

Original languageEnglish (US)
Pages (from-to)9-17
Number of pages9
JournalInternational Journal of Continuing Engineering Education and Life-Long Learning
Volume4
StatePublished - 1994

Fingerprint

art
science
Random processes
market price
stock market
Industry
engineering
school
Financial markets

ASJC Scopus subject areas

  • Engineering(all)

Cite this

@article{4705e0ac0c594f858580dfbdcc1116a0,
title = "Stochastic modelling: art and science",
abstract = "The purpose of this paper is to outline an approach to stochastic modelling, based on explicit hypotheses formulation and the application of elementary probability rules to determine corresponding stochastic processes. Applications including the Poisson process, the random walk hypothesis for stock market prices and other problems are outlined and referred to. Emphasis is given to model construction and not to its analysis. Through the examples treated several approaches to stochastic modelling analysis are highlighted, which are mostly used in stochastic modelling courses in industrial, business and engineering schools. Throughout the paper, it is stressed that, although stochastic modelling and analysis is a science, it is also an art, for it requires that we distinguish the known from the unknown and construct models that account for behaviours and evolutions which we might not, a priori, be aware of.",
author = "Charles Tapiero",
year = "1994",
language = "English (US)",
volume = "4",
pages = "9--17",
journal = "International Journal of Continuing Engineering Education and Life-Long Learning",
issn = "0957-4344",
publisher = "Inderscience Enterprises Ltd",

}

TY - JOUR

T1 - Stochastic modelling

T2 - art and science

AU - Tapiero, Charles

PY - 1994

Y1 - 1994

N2 - The purpose of this paper is to outline an approach to stochastic modelling, based on explicit hypotheses formulation and the application of elementary probability rules to determine corresponding stochastic processes. Applications including the Poisson process, the random walk hypothesis for stock market prices and other problems are outlined and referred to. Emphasis is given to model construction and not to its analysis. Through the examples treated several approaches to stochastic modelling analysis are highlighted, which are mostly used in stochastic modelling courses in industrial, business and engineering schools. Throughout the paper, it is stressed that, although stochastic modelling and analysis is a science, it is also an art, for it requires that we distinguish the known from the unknown and construct models that account for behaviours and evolutions which we might not, a priori, be aware of.

AB - The purpose of this paper is to outline an approach to stochastic modelling, based on explicit hypotheses formulation and the application of elementary probability rules to determine corresponding stochastic processes. Applications including the Poisson process, the random walk hypothesis for stock market prices and other problems are outlined and referred to. Emphasis is given to model construction and not to its analysis. Through the examples treated several approaches to stochastic modelling analysis are highlighted, which are mostly used in stochastic modelling courses in industrial, business and engineering schools. Throughout the paper, it is stressed that, although stochastic modelling and analysis is a science, it is also an art, for it requires that we distinguish the known from the unknown and construct models that account for behaviours and evolutions which we might not, a priori, be aware of.

UR - http://www.scopus.com/inward/record.url?scp=0028570721&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0028570721&partnerID=8YFLogxK

M3 - Article

VL - 4

SP - 9

EP - 17

JO - International Journal of Continuing Engineering Education and Life-Long Learning

JF - International Journal of Continuing Engineering Education and Life-Long Learning

SN - 0957-4344

ER -