On a stochastic differential equation arising in a price impact model

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On a stochastic differential equation arising in a price impact model

We provide sufficient conditions for the existence and uniqueness of solutions to a stochastic differential equation which arises in the price impact model developed in [1] and [2]. These conditions are stated as smoothness and boundedness requirements on utility functions or Malliavin differentiability of payoffs and endowments.

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ژورنال

عنوان ژورنال: Stochastic Processes and their Applications

سال: 2013

ISSN: 0304-4149

DOI: 10.1016/j.spa.2012.10.011