How to cite item

Perpetual Integral Functionals as Hitting and Occupation Times

  
@article{EJP256,
	author = {Paavo Salminen and Marc Yor},
	title = {Perpetual Integral Functionals as Hitting and Occupation Times},
	journal = {Electron. J. Probab.},
	fjournal = {Electronic Journal of Probability},
	volume = {10},
	year = {2005},
	keywords = {},
	abstract = {Let $X$ be a linear diffusion and $f$ a non-negative, Borel measurable function. We are interested in finding conditions on $X$ and $f$ which imply that the perpetual integral functional $$ I^X_\infty(f):=\int_0^\infty f(X_t) dt $$  is identical in law with the first hitting time of a point for some other diffusion.  This phenomenon may often be explained using random time change. Because of some potential  applications in mathematical finance, we are considering mainly the case when $X$ is a Brownian  motion with drift $\mu>0,$ denoted ${B^{(\mu)}_t: t\geq 0},$ but it is obvious that the method  presented is more general. We also review the known examples and give new ones. In particular,  results concerning one-sided functionals  $$ \int_0^\infty f(B^{(\mu)}_t){\bf 1}_{{B^{(\mu)}_t<0}} dt \quad {\rm and} \quad  \int_0^\infty f(B^{(\mu)}_t){\bf 1}_{{B^{(\mu)}_t>0}} dt $$ are presented.  This approach generalizes the proof, based on the random time change techniques,  of the fact that the Dufresne functional (this corresponds to $f(x)=\exp(-2x)),$ playing  quite an important role in the study of geometric Brownian motion, is identical in law with the  first hitting time for a Bessel process. Another functional arising naturally in this context is  $$ \int_0^\infty \big(a+\exp(B^{(\mu)}_t)\big)^{-2} dt, $$ which is seen, in the case  $\mu=1/2,$ to be identical in law with the first hitting time for a Brownian motion with  drift $\mu=a/2.$ The paper is concluded by discussing how the Feynman-Kac formula can be  used to find the distribution of a perpetual integral functional.},
	pages = {no. 11, 371-419},
	issn = {1083-6489},
	doi = {10.1214/EJP.v10-256},    
        url = {http://ejp.ejpecp.org/article/view/256}}