Dr. rer. nat. Volker Hösel
Dipl.-Math., Dipl.-Phys.
Simulation
Computer simulation is used to retrieve relevant information from
a statistical model.
Different scenarios are analysed by changing the model parameters. Repeated runs
of the associated stochastic process provide required estimations.
Typical examples in economics are Markov chain models where states represent
conditions like age, health or buying behaviour. The frequency of changes between
states defines the transition probability of the chain. If one is interested
in the expected total costs of different scenarios (different transition probabilities)
one assigns expenses to the states and executes repeated simulations.
