stochastic models

Stochastic models are tools used to represent systems or processes that involve randomness or unpredictability. They use probability to describe how a system behaves over time, acknowledging that outcomes are not fixed but can vary. For example, they can predict stock market fluctuations or weather patterns by considering various possible scenarios and their likelihoods. These models help us understand and manage uncertainty, providing insights into the range of possible outcomes and their chances, rather than single deterministic predictions.