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Bibliographic Details
Main Authors: Brauner, Claude-Michel, Dong, Yuchao, Liang, Jin, Lorenzi, Luca
Format: Preprint
Published: 2023
Subjects:
Online Access:https://arxiv.org/abs/2401.00198
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Table of Contents:
  • In this paper, we study the stability of traveling wave solutions arising from a credit rating migration problem with a free boundary, After some transformations, we turn the Free Boundary Problem into a fully nonlinear parabolic problem on a fixed domain and establish a rigorous stability analysis of the equilibrium in an exponentially weighted function space. It implies the convergence of the discounted value of bonds that stands as an attenuated traveling wave solution.