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From entropic transport to martingale transport, and applications to model calibration

2024/06/17 by Jean‐David Benamou, Benamou, Jean-David, Guillaume Chazareix +3 · 1 citation
Engineering · #Water resources management and optimization

paper · pdf · doi:10.48550/arxiv.2406.11537

Abstract

We propose a discrete time formulation of the semi-martingale optimal transport problem based on multi-marginal entropic transport. This approach offers a new way to formulate and solve numerically the calibration problem proposed by [17], using a multi-marginal extension of Sinkhorn algorithm as in [6, 10, 7]. When the time step goes to zero we recover, as detailed in the companion paper [8], a continuous semi-martingale process, solution to a semi-martingale optimal transport problem, with a cost function involving the so-called 'specific entropy' , introduced in [13], see also [12] and [2].

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