How interpret that $\mathbb E[|X_t^e-x_t|^2]\leq e^2a(t)$, if $\dot X_t^e=b(X_t^e)+e\sigma (X_t^e)dB_t$

81 Views Asked by At

Consider the stochastic differential equation $$\dot X_t^\varepsilon =b(X_t^\varepsilon )+\varepsilon \sigma (X_t)dB_t,$$ where $X_0^\varepsilon =x_0$.

I have a theorem that says that if $$|b(x)-b(y)|+|\sigma (x)-\sigma (y)|\leq K|x-y|$$ and $$|b(x)|+|\sigma (x)|\leq K(1+|x|),$$

then for all $t>0$ and all $\delta >0$, $$\mathbb E[|X_t^\varepsilon -x_t|^2]\leq \varepsilon ^2a(t)\quad \text{and}\quad \lim_{\varepsilon \to 0}\mathbb P\left\{\max_{0\leq s\leq t}|X_s^\varepsilon -x_s|>\delta \right\}=0,\tag{1}$$ where $\dot x_t=b(x_t)$ and $a$ is an increasing positive function.


Could someone explain what exactly mean $(1)$ ? I see that $\max_{0\leq s\leq t}|X_s^\varepsilon -x_s|$ converges to $0$ in probability, and also that $X_t^\varepsilon \to x_t$ in $L^2$, but I can't really interpret what it really mean.

1

There are 1 best solutions below

0
On BEST ANSWER

This result says basically that as the noise term goes to zero, the solution of the SDE converges to the solution of the corresponding ODE. It is somewhat a weak version of the Freidlin–Wentzell theorem.

Your result (1) may be refined (at least if $\sigma \equiv 1$). For all $\delta>0$ there exists constants $c_1$ and $c_2$ such that: $$ \mathbb{P} (\max_{t \in [0,1]} |X^{\epsilon}_t −x_t|> \delta )\leq c_1 exp(-\frac{c_2}{\epsilon^2}). $$

Such result can be proven quite easily using the Grönwall's inequality.

The term $\epsilon^2$ is important! I would say that the interpretation is the following: the noise perturbates the ODE, but because the noise is in average zero, its impact on the trajectory is really small, as long as $\epsilon$ is small.