
The Simulate
worksheet performs a discrete event simulation of the Markov
Chain. Starting from a specified state, the Markov process
is simulated for 20 or more steps using a Monte Carlo simulation.
The number of steps in the display is set when the worksheet
is created. Additional steps can be simulated by clicking on
the More button. Charts can be made of the state, state value,
cumulative value or discounted value. While all the other worksheets
show probability distributions or expected values over collections
of realizations, the simulation shows a single realization of
the process. The presentation helps illustrate the dynamic nature
of a Markov process and the statistical affects of observing
the process for a finite number of steps.
The figure shows the first 20 steps of the simulation. 