Pricing a stochastic car value depreciation deal |
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| Authors: | Bader Alshamary Ovidiu Calin |
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| Affiliation: | 1. Department of Mathematics, Faculty of Science, Kuwait University, PO Box 5969, Safat 13060, Kuwait;2. Department of Mathematics, Eastern Michigan University, Ypsilanti, MI 48197, U.S.A. |
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| Abstract: | This paper deals with pricing a contract under which a dealer buys back a car from a client, for a cash amount contained in a given depreciation table. The value of the car is supposed to depreciate according to a stochastic model with random repairs modeled by a Poisson process. Copyright © 2013 John Wiley & Sons, Ltd. |
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| Keywords: | Poisson process selling time depreciation |
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