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Doob - Meyer decoposition for submartingales on time scales Nguyen Thanh Dieua Abstract.. The aim of this paper is to study the Doob - Meyer decomposition for a submartingale on time sca

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Doob - Meyer decoposition for submartingales on time scales

Nguyen Thanh Dieu(a) Abstract The aim of this paper is to study the Doob - Meyer decomposition for a submartingale on time scales The obtained results can be considered as a generalization of the Doob - Meyer decomposition for submartingale in the discrete and continuous time.

Introduction

The Doob - Meyer decomposition theorem for a submartingale is one of the central topic in the probability theory In [8], P.A Meyer has proved that a submartingale

belonging to the class D admits a unique decomposition into a sum of a uniformly

integrable martingale and a predictable integrable increasing process Later on, this result is considered in the continuous time in [10] by using the increasing natural process instead the concept of prediction

Moreover, in recent years, the theory of dynamic on time scales, which was intro-duced by Stefan Hilger in his PhD thesis [5], has been born in order to unify continu-ous and discrete analysis Since then, this problem has received much attention from many research groups Therefore, it is natural that we need to transfer this theory to

the so-called stochastic calculus on the time scale The first attempt of this topic is to

consider the Doob - Meyer decomposition for submartingales indexed by a time scale and this is the aim of this paper The obtained result can be considered as a common method to present Doob - Meyer decomposition in the discrete and continuous time The organization of this paper is as follows In section 1 we survey some basic notation and properties of the analysis on time scale In section 2 we presents the main result of Doob - Meyer decomposition theorem for a submartingale on time scale

1 Preliminaries on time scales

This section surveys some notations on the theory of the analysis on time scales which was introduced by Stefan Hilger 1988 [5] A time scale is a nonempty closed subset of the real numbers R, and we usually denote it by the symbol T We assume throughout that a time scale T is endowed with the topology inherited from the real

numbers with the standard topology We define the forward jump operator and the

backward jump operator σ, ρ : T → T by σ(t) = inf{s ∈ T : s > t} (supplemented by inf ∅ = sup T ) and ρ(t) = sup{s ∈ T : s < t} (supplemented by sup ∅ = inf T) The

graininess µ : T → R+∪ {0} is given by µ(t) = σ(t) − t A point t ∈ T is said to be

right-dense if σ(t) = t, right-scattered if σ(t) > t, left-dense if ρ(t) = t, left-scattered if ρ(t) < t,

1 NhËn bµi ngµy 22/5/2009 Söa ch÷a xong 17/11/2009.

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and isolated if t is right-scattered and left-scattered For every a, b ∈ T, by [a, b], we mean the set {t ∈ T : a 6 t 6 b} The set T k is defined to be T if T does not have

a left-scattered maximum; otherwise it is T without this left-scattered maximum

Let f be a function defined on T, valued in R m We say that f is delta differentiable (or simply: differentiable) at t ∈ T k provided there exists a vector f(t) ∈ R m, called

the derivative of f, such that for all ² > 0 there is a neighborhood V around t with

kf (σ(t)) − f (s) − f(t)(σ(t) − s)k 6 ²|σ(t) − s| for all s ∈V If f is differentiable for every

t ∈ T k , then f is said to be differentiable on T If T = R then delta derivative is f 0

(t) from continuous calculus; if T = Z, the delta derivative is the forward difference, ∆f, from discrete calculus A function f defined on T is rd−continuous if it is continuous at

every right-dense point and if the left-sided limit exists at every left-dense point The

set of all rd−continuous function from T to a Banach space X is denoted by Crd(T, X)

A matrix function f from T to R m × R m is said to be regressive if det(I + µ(t)f(t)) 6= 0 for every t ∈ T.

If f : T → R is a function, then we write f σ : T → R for the function f σ = f ◦ σ;

i.e., f σ

t = f (σ(t)) for all t ∈ T Denote I = {t : right-scattered points of T}.

1.1 Proposition ([7]) The set I of all right-scattered points of T is at most countable.

Let A be an increasing rd−contiuous function defined on T Denote by F1 the family of all left close and right open interval of T:

F1= {[a; b) : a, b ∈ T}.

F1 is semiring of subsets of T Let m1 be the set function defined on F1 by

m1([a, b)) = A(b) − A(a).

It is easy to show that m1 is a countably additive measure on F1 We write µ A

∆for the

Caratheodory extension of the set function m1,associated with the family F1 and call

it the Stieljes - Lebesgue ∆−measure associated with A on T.

Let E be an A− measurable set of T\{max T, min T} and f : T → R, be an A

measurable function The integral of f associated with the measures µ A

on E is called

Lebesgue - Stieljes ∆− integral and it is denoted by

Z

E

f (s)∆A(s).

1.2 Example If A(t) = t for all t ∈ T we have µ A

is Lebesgue ∆− measure on T and

R

E f (s)∆A(s) is Lesbesgue ∆− integral.

1.3 Remark By the definition of µ A

∆ we see that

(1) For each t0∈ T k , the single- point set {t0} is ∆ A − measurable, and

µ A({t0}) = A(σ(t0)) − A(t0) (1.1)

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(2) If a, b ∈ T and a 6 b, then

µ A((a, b)) = A(b) − A(σ(a))

µ A((a, b]) = A(σ(b)) − A(σ(a))

µ A([a, b]) = A(σ(b)) − A(a)

2 Doob - Meyer decomposition

Let a ∈ T k We denote Ta = {x ∈ T : x > a} Let (Ω, F, {F t } t∈T a , P) be a space

probability with filtration {F t } t∈T a satisfing the usual conditions The notions of

con-tinuous process, rd−concon-tinuous process, cadlag process, martingale, submartingale, stopping time for a stochastic processes X = {X t : t ∈ T a } on the space probability

(Ω, F, {F t } t∈T a , P)are defined as usually

2.1 Definition A process A = {A t } t∈T a is called increasing if it is Ft −adapted, A a = 0

and the almost sure sample paths of A are increasing on T a

2.2 Proposition If M is a right continuous bounded martingale, A is increasing then for

any t ∈ T a , then

EM t A t= E

Z

[a,t)

Proof Fix a t ∈ T a For any n ∈ N, consider a partion π (n) = {a = t (n)0 < t (n)1 < · · · <

t (n) k n = t} of [a, t] Denote δ π (n) = maxt i ∈π (n) |t i+1 − σ(t i )| Let

N s π (n) =

M σ(a) if s = a

M σ(t (n)

i+1) if s ∈ (t (n) i , t (n) i+1] ∀i = 0, , k n − 2

M t if s ∈ (t (n) k n −1 , t).

Since M is right continuous, M σ

s is also right continuous Therefore,

M s σ = lim

δ π(n) →0 N s π (n) ∀s ∈ [a, t).

Hence, by the bounded convergence theorem we have

E

Z

[a,t)

M s σ ∆A(s) = E

h lim

δ π(n) →0

Z

[a,t)

N s π (n) ∆A(s)

i

δ π(n) →0E

h Z

[a,t)

N s π (n) ∆A(s)

i

δ π(n) →0E

h

M σ(a) A σ(a)

+

kXn −1 i=1

M σ(t (n)

i )(A σ(t (n)

i )− A σ(t (n)

i−1)) + M t (A t − A σ(t (n)

kn−1)) i

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= lim

δ π(n) →0E

h

M t A t+

kXn −1 i=1

A

σ(t (n) i−1)(M

σ(t (n) i )

− M σ(t (n)

i−1)) + A σ(t (n)

kn−1)(M t − M σ(t (n)

kn−1))

i

= EM t A t

For any cadlag function f : T a → R , we define the function f t− by f t− = lims↑t f (s)

for each t ∈ T \ {min T} By convention we put f a− = f (a)

2.3 Definition An increasing process A = (A t)t∈T a is said to be natural if for every

bounded cadlag martingale M = (M t)t∈T a we have

EM t A t= E

Z

[a,t)

2.4 Proposition The rd−continuous, increasing process (A t)t∈T a is natural iff A σ

t is

Ft −measurable for t ∈ I ∩ T a

Proof.

Sufficient condition Suppose that A σ

t is Ft −measurable for t ∈ I ∩ T a Let M t be a

Ft − cadlag martingale and t ∈ T a arbitrary For any n ∈ N, we consider a partition

π (n) = {a = t (n)0 < t (n)1 < · · · < t (n) k n = t} of [a, t] such that δ π (n) = max |t (n) i+1 −σ(t (n) i )| 6 2 −n

Let

M s π (n)=

M σ(t (n)

i ) if s ∈ (t (n) i ; t (n) i+1] ∀i = 0, , k n (n) − 2.

M σ(t (n)

kn−1) if s ∈ (t (n) k n −1 ; t) Since M is a cadlag process,

M s−= lim

δ π(n) →0 M s π (n) ∀s ∈ [a, t).

Therefore, by the bounded convergence theorem we have

E Z

[a,t)

M s− ∆A(s) = E

à lim

δ π(n) →0

Z

[a,t)

M s π (n) ∆A(s)

!

.

We have

E

Z

[a,t)

(M s σ − M s− )∆A s= E lim

δ π(n) →0

Z

[a,t)

(N s π (n) − M s π (n) )∆A s

δ π(n) →0E

·

(M σ(a) − M a )(A σ(a) − A a)

+

k n (n)X−2

i=0

(M σ(t (n)

i+1)− M σ(t (n)

i )(A σ(t (n)

i+1)− A σ(t (n)

i )) + (M t − M σ(t (n)

kn−1))(A t − A σ(t (n)

kn−1))

¸

.

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Because σ(t (n) i ) 6 t (n) i+1 6 σ(t (n) i+1 ) , A t is rd−continuous and M t is right continuous we see that the above limit converges to

s∈I∩[a,t)

(M s σ − M s )(A σ s − A s)

i

.

On the other hand, A σ

s is Fs − measurable for s ∈ I ∩ [a, t) then

E [(M s σ − M s )(A σ s − A s )] = E [E(M s σ − M s )(A σ s − A s )|F s]

= E [(A σ s − A s )E(M s σ − M s |F s )] = 0.

Thus,

E Z

[a,t)

(M s σ − M s− )∆A s = 0.

By using the proposition 2.2 we get

E Z

[a,t)

M s σ ∆A s = E

Z

[a,t)

M s− ∆A s = EM t tA t ,

i.e., (A t) is natural increasing processes

Necessary condition Let A = (A t ) be a natural increasing process We need drive that A σ

t

is Ft −measurable for t ∈ I∩T a Let t ∈ I∩T a It is easy to see the process eA s = A s −A t , s > t

is also natural on Tt Therefore, by (2.2), for any cadlad, bounded martingale M t we have

EM σ(t) (A σ(t) − A t) = E

Z

[t,σ(t))

M τ − ∆A τ = EM t (A σ(t) − A t ).

Or,

E(M σ(t) − M t )(A σ(t) − A t ) = 0 =⇒ E(M σ(t) − M t )A σ(t) = 0.

Since EM t (A σ(t) − E[A σ(t) | F t]) = 0,

E(M σ(t) − M t )(A σ(t) − E[A σ(t) | F t ]) = 0.

It is easy to see that

M τ = X

a6s<τ

(A σ(s) − E[A σ(s) | F s])

is a Fτ −martingale Therefore,

E(M σ(t) − M t )(A σ(t) − E[A σ(t) | F t])

= E(A σ(t) − E[A σ(t) | F t ])(A σ(t) − E[A σ(t) | F t ]) = 0, which implies that A σ(t) − E[A σ(t) | F t] = 0 a.s The proof is complete ¤

2.5 Corollary (A t ) is increasing process on time scale T

i) T = N then (A t ) is natural iff it is previsible.

ii) T = R then evry increasing process (A t ) is natural if it is continuous.

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i) If T = N, then any point t ∈ T right- scattered and σ(t) = t + 1 Therefore, by the proposition 2.4, A t is natural if and only if A t+1is Ft −measurable, i.e., (A n) is a previsible process

ii) When T = R we have σ(t) = t for all t ∈ T Since A t is increaing, A t is Ft −measurable.

¤

We recall the Dunford - Pettis theorem in [1]

2.6 Theorem (Dunford - Pettis [1]) If (Y n)n∈N is uniformly integrable sequence of random variables, there exists an integrable random variable Y and a subsequence (Y n k)k∈N such that weak-lim k→∞ Y n k = Y , i.e., for all bounded random variables ξ we have

lim

k→∞ E(ξY n k ) = E(ξY )

A process X is said to be:

- of class (D) if the set

{X τ : τ is a stopping time satisfying a 6 τ < ∞}

is uniformly integrable

- of class (DL) if for every t ∈ T athe set

{X τ : τ is a stopping time satisfying a 6 τ 6 t}

is uniformly integrable

2.7 Theorem (Doob-Meyer decomposition) Let X be a right continuous submartingale

of class (DL) Then, there exist a right continuous martingale and a right continuous increasing process A such that

X t = M t + A t ∀t ∈ T a a.s.

If A is natural then M and A are uniquely determined up to indistinguishability If X is of class (D) then M and A are uniformly integrable.

Proof First we proof uniqueness Suppose there exist two right continuous martingales M ,

M 0 and two right continuous natural increasing processes A, A 0 such that

X t = M t + A t = M t 0 + A 0 t ∀t ∈ T a a.s.

This relation implies that

B t = A t − A 0 t = M t 0 − M t is right continuous martingale.

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Let ξ t be an arbitrary right continuous bounded martingale For each partition π (n) : a =

t (n)0 < t (n)1 < · · · < t (n) n = t of [a, t], we set

ξ s π (n) =

ξ σ(t (n)

i ) if s ∈ (t (n) i ; t (n) i+1] ∀i = 0, 1, , n − 2

ξ σ(t (n)

n−1) if s ∈ (t (n) n−1 ; t)

.

we have

ξ s−= lim

δ π(n) →0 ξ s π (n) ∀s ∈ [a, t)

By the bounded convergence theorem we have

E

Z

[a,t)

ξ s− ∆A(s) = E lim

δ π(n) →0

Z

[a,t)

ξ s π (n) ∆A(s)

= E lim

δ π(n) →0

h

ξ0(A σ(0) − A0) +

n−2

X

i=0

ξ σ(t i)(A σ(t i+1)

− A σ(t i)) + ξ σ(t n−1)(A t − A σ(t n−1))

i Therefore,

Eξ t (A t − A 0 t) = E

Z

[a,t)

ξ s− ∆A(s) − E

Z

[a,t)

ξ s− ∆A 0 (s)

= E lim

δ π(n) →0

h

ξ0(B σ(0) − B0) +

n−2

X

i=0

ξ σ(t i)(B σ(t i+1)− B σ(t i))

+ ξ σ(t n−1)(B t − B σ(t n−1))

i

δ π(n) →0E

h

ξ0(B σ(0) − B0) +

n−2

X

i=0

ξ σ(t i)(B σ(t i+1)− B σ(t i)) + ξ σ(t n−1)(B t − B σ(t n−1))

i

Thus

Eξ t (A t − A 0 t ) = 0.

Now let X be an arbitrary bounded random variable and let us define the bounded mar-tingale ξ by taking a right continuous version of E(X|F t)t∈T a From the above,

E(X(A t − A 0 t)) = E

·

E(X(A t − A 0 t )|Ft)

¸

= E£(A t − A 0 t )E(X|Ft)¤= Eξ t (A t − A 0 t ) = 0 Since the choice of X was arbitrary, it follows that A t = A 0 t almost surely for a fixed

t > 0 By virtue of the right continuity of A and A 0 , we conclude that A and A 0 are

indistinguishable Hence, M = X − A and M 0 = X − A 0 are indistinguishable as well

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Next, we prove the existence of the decomposition By uniqueness, it suffices to prove

the existence of the processes M and A on the interval [a; b] for fixed b ∈ T a Without loss

of generality we may assume that X a = 0 Let π (n) : a = t (n)0 < t (n)1 < · · · < t (n) N = b be

a partition of [a, b] such that δ π (n) = maxt i ∈π (n) |t i − σ(t i−1 )| 6 1

2n Consider the Doob

-Meyer decomposition of the finite submartingale X (n) = (X t (n)

j

)t (n)

j ∈π (n)

X t (n)

j

= M (n)

t (n) j + A (n)

t (n) j

Thus, M (n) = {M (n)

t (n) j }

t (n) j ∈π (n) is a martingale satisfying M a (n) = X a and A (n) = {A (n)

t (n) j }

t (n) j ∈π (n)

is a previsible and increasing Therefore,

M (n)

t (n) j = E(M b (n) |Ft(n)

j

) = E(X b − A (n) b |Ft(n)

j

)

2.8 Lemma {A (n) b : n = 1, 2, · · · } is uniformly integrable.

Proof Let λ > 0 be fix and define the random variable T λ (n) by

T λ (n)=

min{t (n) j−1: j = 1, 2, , N and A (n)

t (n) j > λ}

b if {t (n) j−1 : j = 1, 2, , N and A (n)

t (n) j > λ} = ∅ .

Since A (n) is increasing,

{T λ (n) 6 t (n) j−1 } = {A (n)

t (n) j > λ},

and this set belongs to Ft (n)

j−1 by the previsibility of A (n) It is easy to see that T λ (n) is a stopping time By noting that

{T λ (n) < b} = {A (n) b > λ}

and that A (n)

T λ (n) 6 λ on this set, we obtain

0 6 1

2

Z

A (n) b >2λ

A (n) b dP 6

Z

A (n) b >2λ

(A (n) b − λ)dP

6 Z

A (n) b >2λ

(A (n) b − A (n)

T λ (n) )dP 6

Z

(A (n) b − A (n)

T λ (n) )dP

= Z

(X b − X T (n)

λ

)dP =

Z

{A (n) b >λ}

(X b − X T (n)

λ

)dP.

By using Chebyshev inequality we have:

P{A (n) b > λ} 6 EA

(n)

b

EX b

λ → 0 where λ → ∞.

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Hence, limλ→∞ P(A (n) > λ) = 0 uniformly Since X is assumed to be of class (DL),

Z

{A (n) b >λ}

(X b − X

T λ (n) )dP → 0 where λ → ∞.

A (n) >2λ

A (n) b dP → 0 where λ → ∞,

Now we return to the proof of Theorem 2.8 By the Dunford - Pettis theorem, there

is a subsequence (A (n k)

b )k∈N converging weakly to an integrable random variable A b We

claim that for any sub σ− algebra G of F,

weakly- lim

k→∞ E(A (n k)

b |G) = E(A b |G).

To prove this, fix an arbitrary bounded random variable η Then,

lim

k→∞ E(ηE(A (n k)

b |G)) = lim

k→∞ E(E(ηE(A (n k)

b |G)|G))

= lim

k→∞ E(E(A (n k)

b |G)E(η|G)) = lim

k→∞ E(E(A (n k)

b E(η|G)|G))

= lim

k→∞ E(A (n k)

b E(η|G)) = E(A b E(η|G)) = E(ηE(A b |G)).

We now define the processes M and A by

M t = E(X b − A b |F t ); A t = X t − M t ; ∀t ∈ [a, b], where A b is the weak limit point of an appropriate subsequence of (A (n) b ) In the first

definition we take a right continuous version of the martingale M t which implies that the

process A is right continuous, A t is integrable for each t We see that

A a = X a − E(X b − A b |F a ) = X a − weak- lim

k→∞ E(X b − A (n k)

b |F a)

= X a − weak- lim

k→∞ E(M (n k)

b |F a ) = X a − weak- lim

k→∞ M (n k)

a

= weak- lim

k→∞ A (n k)

a = 0.

Let Π =Sn∈N π (n) If a 6 s 6 t 6 b with s, t ∈ Π are fixed then

A t − A s = X t − X s − E(X b − A b |F t ) − E(X b − A b |F s)

= X t − X s − weak- lim

k→∞

³

E(X b − A (n k)

b |F t ) − E(X b − A (n k)

b |F s)

´

= X t − X s − weak- lim

k→∞

³

E(M (n k)

b |F t ) − E(M (n k)

b |F s)

´

weak- lim

k→∞

³

EA (n k)

t − EA (n k)

s

´

> 0.

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Since Π is countable and A is right continuous, it follows that there is a version of A t such

that A t > A s for all t > s in [a; b] almost surely It follows that A is increasing Next

we check that A is natural Let ξ be any right continuous bounded martingale By the predictability of A (n) then

E

·

ξ b A (n) b

¸

= Eξ b (A (n) σ(a) − A (n) a ) + X

t (n) k ∈π (n)

Eξ a (A (n)

σ(t (n) k )− A (n)

σ(t (n) k−1))

= Eξ σ(a) (A (n) σ(a) − A (n) a ) + X

t (n) k ∈π (n)

Eξ σ(t (n)

k−1)(A (n)

σ(t (n) k )− A (n)

σ(t (n) k−1)) Where n enough large the right hand of the obove relation equals to

Eξ σ(a) (A σ(a) − A a) + X

t (n) k ∈π (n)

Eξ σ(t (n)

k−1)(A σ(t (n)

k )− A σ(t (n)

k−1)).

Letting n → ∞ we obtain

Eξ σ(a) (A σ(a) − A a) + X

t (n) k ∈π (n)

Eξ σ(t (n)

k−1)(A σ(t (n)

k )− A σ(t (n)

k−1)) → E

Z

[a,b)

ξ s− ∆A(s),

and

E

h

ξ b A (n) b

i

→ E [ξ b A b ]

So, we have

E [ξ b A b] = E

Z

[a,b)

ξ s− ∆A(s).

Replacing ξ = (ξ s ) by ξ = ξ t∧s for each t ∈ [a, b] it easy to conclude that

E [ξ t A t] = E

Z

[a,t)

ξ s− ∆A(s).

Thus A = (A t) is natural

Finally, if X is of class (D), then X is uniformly integrable and the limit X ∞ = limt→∞ X t exists almost surely and this limit belongs to L1 The Doob - Meyer

decom-positions of the discrete submartingales X (n) along the partitions π (n) = {t (n) j : j ∈ N} of

Ta , are then uniformly integrable as well, and we may define A ∞ as the weak limit of an

appropriate subsequence of (A (n) ∞)n∈N , where A (n) ∞ := limj→∞ A (n)

t (n) j The details carry over

References

1 Lav Kallenberg, Foundations of Modern Probability, Springer Verlag, New York Berlin Heidelberg, 2001

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