Crowd effects and volatility in a competitive market
Condensed Matter
2007-05-23 v1 adap-org
Adaptation and Self-Organizing Systems
Abstract
We present analytic and numerical results for two models, namely the minority model and the bar-attendance model, which offer simple paradigms for a competitive marketplace. Both models feature heterogeneous agents with bounded rationality who act using inductive reasoning. We find that the effects of crowding are crucial to the understanding of the macroscopic fluctuations, or `volatility', in the resulting dynamics of these systems.
Keywords
Cite
@article{arxiv.cond-mat/9811227,
title = {Crowd effects and volatility in a competitive market},
author = {Neil F. Johnson and Michael Hart and Pak Ming Hui},
journal= {arXiv preprint arXiv:cond-mat/9811227},
year = {2007}
}
Comments
13 pages + 3 figures. E-mail: n.johnson@physics.oxford.ac.uk