Stop Waiting Problem: Decision Rule with Ψ (PSI) Function and Application with Share Prices
9 Pages Posted: 5 Mar 2014 Last revised: 22 Aug 2014
Date Written: March 4, 2014
In this paper the stop-waiting strategy of Franz Bruss is set into a simple probabilistic framework and applied to the apple share prices from 1984 to 2013. Within the probabilistic framework a heuristic and a mathematical decision rule using the Ψ function is developed. The results are in line with Bruss's theory. We apply the stop-waiting strategy to the Apple share prices and compare the results with a simple start-end and chart technique strategy.
Keywords: Optimal Stopping Problem, Mathematical Tools, Share Market
JEL Classification: C65, E47, G17
Suggested Citation: Suggested Citation