Value Function Research Articles

What Makes a Business Model Sustainable? Activities, Design Themes, and Value Functions

What makes a business model sustainable? To answer this question, we conducted a systematic review of 390 journal articles on business models for sustainability (BMfS). Building on the activity system perspective, we engaged in an active categorization process, in which we identified 26 activity groups focused on 12 design themes. These activities and design themes are associated with organizations’ potential to use their business models to contribute to sustainable value creation. Our analysis also revealed that the identified activities and design themes can be related to three overarching value functions of BMfS: maintaining, unlocking, and sharing value. Our findings indicate that these value functions play a pivotal role in creating sustainable value through business models. The identified design themes can serve as guiding principles for organizations seeking to make their business models sustainable, while the identified value functions can provide a foundation for theorizing on sustainable value creation through business models.

Prediction Horizon-Varying Model Predictive Control (MPC) for Autonomous Vehicle Control

The prediction horizon is a key parameter in model predictive control (MPC), which is related to the effectiveness and stability of model predictive control. In vehicle control, the selection of a prediction horizon is influenced by factors such as speed, path curvature, and target point density. To accommodate varying conditions such as road curvature and vehicle speed, we proposed a control strategy using the proximal policy optimization (PPO) algorithm to adjust the prediction horizon, enabling MPC to achieve optimal performance, and called it PPO-MPC. We established a state space related to the path information and vehicle state, regarded the prediction horizon as actions, and designed a reward function to optimize the policy and value function. We conducted simulation verifications at various speeds and compared them with an MPC with fixed prediction horizons. The simulation demonstrates that the PPO-MPC proposed in this article exhibits strong adaptability and trajectory tracking capability.

Pythagorean Z-linguistic VIKOR method based on modified value function under Pythagorean Z-linguistic environment and its application on smart healthcare

Pythagorean Z-linguistic VIKOR method based on modified value function under Pythagorean Z-linguistic environment and its application on smart healthcare

Viscosity solutions approach to finite-horizon continuous-time Markov decision process

This paper investigates the optimal control problems for the finite-horizon continuous-time Markov decision processes with delay-dependent control policies. We develop compactification methods in decision processes and show that the existence of optimal policies. Subsequently, through the dynamic programming principle of the delay-dependent control policies, the differential-difference Hamilton-Jacobi-Bellman (HJB) equation in the setting of discrete space is established. Under certain conditions, we give the comparison principle and further prove that the value function is the unique viscosity solution to this HJB equation. Based on this, we show that among the class of delay-dependent control policies, there is an optimal one which is Markovian.

On the sigma-mu stochastic multicriteria analysis: Exact solutions for common particular cases

The sigma-mu approach is one of the recent innovations in the field of multicriteria decision aiding and composite indicators, extending the stochastic multicriteria acceptability analysis (SMAA) toolbox. The initial stage of this method involves computing the mean (mu) and standard deviation (sigma) for the composite value of the units under evaluation, considering a stochastic distribution on a set of admissible weights. This work develops closed-form formulas to obtain exact values for mu and sigma without needing approximations via Monte-Carlo simulations, which can be applied in some cases that are quite common. In terms of aggregation, these cases are characterized by an additive model, such as a weighted sum, a multiattribute value function, or PROMETHEE II. In terms of stochastic distributions, these cases include uniformly distributed unconstrained vectors of weights, rank-ordered vectors of weights, or lower-bounded weights. The developed formulas are applied to a didactic example and some open problems for future research are suggested.

Linear programming sensitivity measured by the optimal value worst-case analysis

This paper introduces the concept of a derivative of the optimal value function in linear programming (LP). Basically, it is the worst case optimal value of an interval LP problem when the nominal data are inflated to intervals according to given perturbation patterns. By definition, the derivative expresses how the optimal value can worsen when the data are subject to variations. In addition, it also gives a certain sensitivity measure or condition number of an LP problem. If the LP problem is nondegenerate, the derivatives are easy to calculate from the computed primal and dual optimal solutions. For degenerate problems, the computation is more difficult. We propose an upper bound and some kind of characterization, but there are many open problems remaining. We carried out numerical experiments with specific LP problems and with real LP data from Netlib repository. They show that the derivatives give a suitable sensitivity measure of LP problems. It remains an open problem how to efficiently and rigorously handle degenerate problems.

Asymptotic Methods for Transaction Costs

We propose a general approximation method for the determination of optimal trading strategies in markets with proportional transaction costs, with a polynomial approximation of the residual value function. The method is exemplified by several problems, from optimally tracking benchmarks and hedging the log contract to maximizing utility from terminal wealth. Strategies are also approximated by practically executable, discrete trades. We identify the necessary trade-off between the trading frequency and trade size to ensure satisfactory agreement with the theoretically optimal, continuous strategies of infinite activity.

Approximate optimal and safe coordination of nonlinear second-order multirobot systems with model uncertainties

This paper investigates the approximate optimal coordination for nonlinear uncertain second-order multi-robot systems with guaranteed safety (collision avoidance) Through constructing novel local error signals, the collision-free control objective is formulated into an coordination optimization problem for nominal multi-robot systems. Based on approximate dynamic programming technique, the optimal value functions and control policies are learned by simplified critic-only neural networks (NNs). Then, the approximated optimal controllers are redesigned using adaptive law to handle the effects of robots’ uncertain dynamics. It is shown that the NN weights estimation errors are uniformly ultimately bounded under proper conditions, and safe coordination of multiple robots can be achieved regardless of model uncertainties. Numerical simulations finally illustrate the effectiveness of the proposed controller.

Demand response for residential building heating: Effective Monte Carlo Tree Search control based on physics-informed neural networks

To reduce global carbon emissions and limit climate change, controlling energy consumption in buildings is an important piece of the puzzle. Here, we specifically focus on using a demand response (DR) algorithm to limit the energy consumption of a residential building's heating system while respecting user's thermal comfort. In that domain, Reinforcement learning (RL) methods have been shown to be quite effective. One such RL method is Monte Carlo Tree Search (MCTS), which has achieved impressive success in playing board games (go, chess). A particular advantage of MCTS is that its decision tree structure naturally allows to integrate exogenous constraints (e.g., by trimming branches that violate them), while conventional RL solutions need more elaborate techniques (e.g., indirectly by adding penalties in the cost/reward function, or through a backup controller that corrects constraint-violating actions). The main aim of this paper is to study the adoption of MCTS for building control, since this (to the best of our knowledge) has remained largely unexplored. A specific property of MCTS is that it needs a simulator component that can predict subsequent system states, based on actions taken. A straightforward data-driven solution is to use black-box neural networks (NNs). We will however extend a Physics-informed Neural Network (PiNN) model to deliver multi-timestep predictions, and show the benefit it offers in terms of lower prediction errors (−32% MAE) as well as better MCTS performance (−4% energy cost, +7% thermal comfort) compared to a black-box NN. A second contribution will be to extend a vanilla MCTS version to adopt the ideas applied in AlphaZero (i.e., using learned prior and value functions and an action selection heuristic) to obtain lower computational costs while maintaining control performance.

Dynamic symmetrization in a memristive HR neuron

AbstractThe significance of neuronal discharge symmetry lies in its reflection of the stability and orderliness within the neuron's activity. This symmetry is correlated with various issues, including the biophysical properties within neurons, network structures, and synaptic transmission. Memristors are highly analogous to neuronal synapses due to their unique memory properties, allowing them to emulate biological neural synapses. In this work, a memristor is employed into the Hindmarsh‐Rose (HR) neuron as a synapse for the construction of a memristive HR neuron. Accompanied with the introducing of the absolute value and signum function, the derived neurons exhibit complex coexisting symmetric firing patterns. The phenomenon of symmetric firing can effectively simulate the depolarization and hyperpolarization processes of neurons, providing a new approach to study the diversity of the brain.

Distributed Multi-Area Intraday Economic Dispatch Using Modified Critical Region Projection Algorithm

Convergence acceleration is always a critical issue in distributed multi-area scheduling. The critical region projection (CRP) algorithm based on multi-parametric quadratic programming (MPQP) shows better convergence performance for multi-area static economic dispatch. However, its imperfect decomposition framework cannot be directly applied to dynamic economic dispatch. Therefore, this paper modifies the CRP algorithm to achieve fast distributed multi-area intra-day economic dispatch (MAIDED). First, we introduce slack variables to each area and add the corresponding penalty term into their objective functions to present a primal decomposition framework with penalty relaxation. It is more realistic than the decomposition framework of traditional CRP (TCRP). Then, an iterative algorithm of double spatial scale search (DSSS) is developed to improve the convergence rate of distributed solving based on the similar optimal value function in adjacent critical regions (CRs). Moreover, we design an initial value selection method based on data fitting to further reduce the number of iterations. Finally, three interconnected power systems of different sizes are used for numerical testing to demonstrate that the proposed modified CRP (MCRP) algorithm can meet the practical application and has higher convergence efficiency. <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Note to Practitioners</i> —This paper is motivated by the problem of distributed MAIDED for power systems but it also applies to other multi-agent networks with a coordinator. The convergence speed of the existing distributed optimization algorithm is slow, which increases the risk of communication failure and attack. Meanwhile, more iterations will result in increased communication and computing costs. This paper modified the TCRP algorithm for high-efficient distributed MAIDED. The penalty relaxation is used to ensure that the decomposition framework is consistent with the actual system operation. The DSSS algorithm and the initial value selection method based on data fitting are designed to effectively reduce the number of iterations. In this paper, the DSSS is that the coordinator enlarges the CRs uploaded from each area to perform a rough optimization for approaching the global optimal solution fast, and then in the next iteration, conducts a precise optimization like the TCRP algorithm to determine the precise optimal solution. The numerical testing of the interconnected power systems of different sizes indicates that the MCRP algorithm has fewer iterations and calculation times than the TCRP algorithm. Future work will extend the MCRP algorithm to solve the distributed multi-area unit commitment problem.

Real option pricing under the regime-switching model with jumps on a finite time horizon

We consider an irreversible investment decision problem on a finite time horizon where an instantaneous cash flow process of a firm follows a regime-switching jump-diffusion (RSJD) model. The value of a project can be derived from a partial integro-differential equation (PIDE) and then we obtain a closed-form solution of the PIDE. It is proved that the value of the project converges to the solution on an infinite time horizon problem as the lifetime of the project tends to infinity. Moreover, the value function of a real option with a finite expiration date can be evaluated by solving a linear complementarity problem (LCP) under the RSJD model. We apply a 2-step backward differentiation formula (BDF2 method) combined with an operator splitting method to solve the LCP and then it has the second-order convergence rate in the discrete ℓ2-norm with respect to the time and spatial variables. The stability of the proposed method to solve the LCP is also proved in the discrete ℓ2-norm. Finally, a variety of numerical experiments are carried out to determine the optimal investment time and the numerical results on the finite time horizon are analyzed.

Adaptive Virotherapy Strategy for Organism With Constrained Input Using Medicine Dosage Regulation Mechanism.

In this article, the constrained adaptive control strategy based on virotherapy is investigated for organism using the medicine dosage regulation mechanism (MDRM). First, the tumor-virus-immune interaction dynamics is established to model the relations among the tumor cells (TCs), virus particles, and the immune response. The adaptive dynamic programming (ADP) method is extended to approximately obtain the optimal strategy for the interaction system to reduce the populations of TCs. Due to the consideration of asymmetric control constraints, the nonquadratic functions are proposed to formulate the value function such that the corresponding Hamilton-Jacobi-Bellman equation (HJBE) is derived which can be deemed as the cornerstone of ADP algorithms. Then, the ADP method of a single-critic network architecture which integrates MDRM is proposed to obtain the approximate solutions of HJBE and eventually derive the optimal strategy. The design of MDRM makes it possible for the dosage of the agentia containing oncolytic virus particles to be regulated timely and necessarily. Furthermore, the uniform ultimate boundedness of the system states and critic weight estimation errors is validated by Lyapunov stability analysis. Finally, simulation results are given to show the effectiveness of the derived therapeutic strategy.

Markov selections and Feller properties of nonlinear diffusions

In this paper we study a family of nonlinear (conditional) expectations that can be understood as a diffusion with uncertain local characteristics. Here, the differential characteristics are prescribed by a set-valued function. We establish its Feller properties and examine how to linearize the associated sublinear Markovian semigroup. In particular, we observe a novel smoothing effect of sublinear semigroups in frameworks which carry enough randomness. Furthermore, we link the value function corresponding to the semigroup to a nonlinear Kolmogorov equation. This provides a connection to the so-called Nisio semigroup.

Accelerating value function approximations for dynamic dial-a-ride problems via dimensionality reductions

As the success of ride-sharing mobility service providers shows, customer demand for shared mobility services is increasing. The availability of mobile devices enables the constant accessibility of mobility apps and the immediate placement of transport requests. To provide such a dynamic dial-a-ride service, an effective control of the fleet is necessary. One promising solution approach is the value function approximation (VFA), which on the one hand convinces through good performance, but on the other hand also stands out through fast response times for a request. Training a VFA can be a challenging task since, among other things, the dimensionality of the state space plays a decisive role. If many variables to describe a state are used, a high amount of information can produce good performance after completion of the learning process. If the state space is too high-dimensional, there is also a risk that the method will not be able to find a reasonable solution. In contrast, if the number of variables is reduced, the learning speed can be accelerated, but the eventual performance may suffer from the associated loss of information. Furthermore, not all variables are equally relevant, as they contain different amounts of information. This paper presents a hybrid strategy, temporarily lowering the dimensionality of the problem using dimension reduction methods and subsequently increasing it by mapping the lower-dimensional state representations back onto a high-dimensional state space in order to exploit the advantages of both space dimensionalities. VFA in itself results in competitive performance for the dynamic dial-a-ride problem with shared rides. The proposed hybrid state representation can outperform the reference state representations by 3%, which corresponds to a meaningful acceleration in VFA learning speed.

Gerber-Shiu theory for discrete risk processes in a regime switching environment

In this paper we develop the Gerber-Shiu theory for the classic and dual discrete risk processes in a Markovian (regime switching) environment. In particular, by expressing the Gerber-Shiu function in terms of potential measures of an upward (downward) skip-free discrete-time and discrete-space Markov Additive Process (MAP), we derive closed form expressions for the Gerber-Shiu function in terms of the so-called (discrete) Wv and Zv scale matrices, which were introduced in [27]. We show that the discrete scale matrices allow for a unified approach for identifying the Gerber-Shiu function as well as the value function of the associated constant dividend barrier problems.

Controlled Reflected McKean–Vlasov SDEs and Neumann Problem for Backward SPDEs

This paper is concerned with the stochastic optimal control problem of a 1-dimensional McKean–Vlasov stochastic differential equation (SDE) with reflection, of which the drift coefficient and diffusion coefficient can be both dependent on the state of the solution process along with its law and control. One backward stochastic partial differential equation (BSPDE) with the Neumann boundary condition can represent the value function of this control problem. Existence and uniqueness of the solution to the above equation are obtained. Finally, the optimal feedback control can be constructed by the BSPDE.

Research on Behavioral Decision at an Unsignalized Roundabout for Automatic Driving Based on Proximal Policy Optimization Algorithm

Unsignalized roundabouts have a significant impact on traffic flow and vehicle safety. To address the challenge of autonomous vehicles passing through roundabouts with low penetration, improve their efficiency, and ensure safety and stability, we propose the proximal policy optimization (PPO) algorithm to enhance decision-making behavior. We develop an optimization-based behavioral choice model for autonomous vehicles that incorporates gap acceptance theory and deep reinforcement learning using the PPO algorithm. Additionally, we employ the CoordConv network to establish an aerial view for spatial perception information gathering. Furthermore, a dynamic multi-objective reward mechanism is introduced to maximize the PPO algorithm’s reward pool function while quantifying environmental factors. Through simulation experiments, we demonstrate that our optimized PPO algorithm significantly improves training efficiency by enhancing the reward value function by 2.85%, 7.17%, and 19.58% in scenarios with 20, 100, and 200 social vehicles, respectively, compared to the PPO+CCMR algorithm. The effectiveness of simulation training also increases by 11.1%, 13.8%, and 7.4%. Moreover, there is a reduction in crossing time by 2.37%, 2.62%, and 13.96%. Our optimized PPO algorithm enhances path selection during autonomous vehicle simulation training as they tend to drive in the inner ring over time; however, the influence of social vehicles on path selection diminishes as their quantity increases. The safety of autonomous vehicles remains largely unaffected by our optimized PPO algorithm.

Heuristic Expanding Disconnected Graph: A Rapid Path Planning Method for Mobile Robots

Existing mobile robots mostly use graph search algorithms for path planning, which suffer from relatively low planning efficiency owing to high redundancy and large computational complexity. Due to the limitations of the neighborhood search strategy, the robots could hardly obtain the most optimal global path. A global path planning algorithm, denoted as EDG*, is proposed by expanding nodes using a well-designed expanding disconnected graph operator (EDG) in this paper. Firstly, all obstacles are marked and their corners are located through the map pre-processing. Then, the EDG operator is designed to find points in non-obstruction areas to complete the rapid expansion of disconnected nodes. Finally, the EDG* heuristic iterative algorithm is proposed. It selects the candidate node through a specific valuation function and realizes the node expansion while avoiding collision with a minimum offset. Path planning experiments were conducted in a typical indoor environment and on the public dataset CSM. The result shows that the proposed EDG* reduced the planning time by more than 90% and total length of paths reduced by more than 4.6%. Compared to A*, Dijkstra and JPS, EDG* does not show an exponential explosion effect in map size. The EDG* showed better performance in terms of path smoothness, and collision avoidance. This shows that the EDG* algorithm proposed in this paper can improve the efficiency of path planning and enhance path quality.

Probabilistic linguistic prospect outranking risk decision making method based on stochastic dominance and application in emergency plan evaluation

In the decision-making process, probabilistic linguistic term sets (PLTSs) could represent decision-makers’ uncertain evaluation information. The combination of probabilistic and linguistic information assists decision-makers to depict their evaluation information more flexibly. In this paper, a prospect outranking decision-making method based on stochastic dominance is proposed for solving the multi-attribute risk decision-making problem under the probabilistic linguistic information environment. Firstly, to fully preserve the original probabilistic linguistic information, we give the definitions of the generalized probability distribution and the corresponding generalized cumulative distribution function of a PLTS for defining the distance measure between PLTSs. Secondly, based on the positive and negative ideal cumulative distribution functions, we propose the probabilistic linguistic prospect value functions. After that, considering the uncertainty of the relationship between alternatives, several kinds of novel prospect stochastic dominance and almost stochastic dominance relations are defined, which consider the decision makers’ distinction between gains and losses to measure the subtle relationship between alternatives. The stochastic dominance approach and the almost stochastic dominance approach under the probabilistic linguistic decision-making environment are put forward. Besides, we use the superiority and inferiority ranking method to solve the dominance ranking problem of the uncertainty relationship between any two alternatives. Finally, the proposed method is applied in the evaluation of emergency plans to show the accuracy and reliability, and comparative analyses are made to illustrate its availability.