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Problem:
I'm working in reliability field and have seen papers written on the topic like process of failures when systems are functioning under unobservable (or observable) Markov-like environment, i.e. probability to fail is dependent on the state of environment. This state is described as discrete-state discrete-time homogeneous Markov chain. In mathematical notation it would be like this:
$P\left [ X_{t}=k | Y_{t}=i \right ]=\pi _{k}\left ( i \right )$;
where $X _{t}$ is a binary random failure process with possible states 0 (failed) and 1 (working). And $Y _{t}$ is a Markov process at the moment $t$ being in the $i ^{th}$ state.

My question:

Is it possible (or even reasonable) to extend mentioned model, for ? For example, for continuous state from discrete-state to continuous-state Markov model? Is there any literature (I havent found yet) about continuous stochastic conditional processes. I suppose it is not so trivial, because for continuouse stochastic process statements like $Y_{t}=i$ are meaninglessdue to continuity.

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# stochastic processes conditional on other stochastic processes

Problem:
I'm working in reliability field and have seen papers written on the topic like process of failures when systems are functioning under unobservable (or observable) Markov-like environment, i.e. probability to fail is dependent on the state of environment. This state is described as discrete-state discrete-time homogeneous Markov chain. In mathematical notation it would be like this:
$P\left [ X_{t}=k | Y_{t}=i \right ]=\pi _{k}\left ( i \right )$;
where $X _{t}$ is a binary random failure process with possible states 0 (failed) and 1 (working). And $Y _{t}$ is a Markov process at the moment $t$ being in the $i ^{th}$ state.

My question:

Is it possible (or even reasonable) to extend mentioned model, for example, for continuous state Markov model? Is there any literature (I havent found yet) about continuous stochastic conditional processes. I suppose it is not so trivial, because for continuouse stochastic process statements like $Y_{t}=i$ are meaningless due to continuity.