Properties of a job search problem on a partially observable Markov chain in a dynamic economy

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Abstract

This paper observes a job search problem on a partially observable Markov chain, which can be considered as an extension of a job search in a dynamic economy in [1]. This problem is formulated as the state changes according to a partially observable Markov chain, i.e., the current state cannot be observed but there exists some information regarding what a present state is. All information about the unobservable state are summarized by the probability distributions on the state space, and we employ the Bayes' theorem as a learning procedure. The total positivity of order two, or simply TP2, is a fundamental property to investigate sequential decision problems, and it also plays an important role in the Bayesian learning procedure for a partially observable Markov process. By using this property, we consider some relationships among prior and posterior information, and the optimal policy. We will also observe the probabilities to make a transition into each state after some additional transitions by empolying the optimal policy. In the stock market, suppose that the states correspond to the business situation of one company and if there is a state designating the default, then the problem is what time the stocks are sold off before bankrupt, and the probability to become bankrupt will be also observed. © 2006 Elsevier Ltd. All rights reserved.

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APA

Nakai, T. (2006). Properties of a job search problem on a partially observable Markov chain in a dynamic economy. In Computers and Mathematics with Applications (Vol. 51, pp. 189–198). https://doi.org/10.1016/j.camwa.2005.11.019

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