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We propose a class of Markovian agent based models for the time evolution of a share price in an interactive market. The models rely on a microscopic description of a market of buyers and sellers who change their opinion about the stock…

Other Condensed Matter · Physics 2016-08-31 Anton Bovier , Jiri Cerny , Ostap Hryniv

Collusion in market pricing is a concept associated with human actions to raise market prices through artificially limited supply. Recently, the idea of algorithmic collusion was put forward, where the human action in the pricing process is…

Theoretical Economics · Economics 2025-01-29 Suzie Grondin , Arthur Charpentier , Philipp Ratz

This paper explores the bifurcative dynamics of an artificial stock market exchange (ASME) with endogenous, myopic traders interacting through a limit order book (LOB). We showed that agent-based price dynamics possess intrinsic…

Trading and Market Microstructure · Quantitative Finance 2025-08-26 Matej Steinbacher , Mitja Steinbacher , Matjaz Steinbacher

We propose a frustrated and disordered many-body model of a stockmarket in which independent adaptive traders can trade a stock subject to the economic law of supply and demand. We show that the typical scaling properties and the correlated…

Statistical Mechanics · Physics 2008-12-02 Fabio Franci , Lorenzo Matassini

The ultimate value of theories of the fundamental mechanisms comprising the asset price in financial systems will be reflected in the capacity of such theories to understand these systems. Although the models that explain the various states…

Trading and Market Microstructure · Quantitative Finance 2016-04-27 Kyubin Yim , Gabjin Oh , Seunghwan Kim

The agent-based model of stock price dynamics on a directed evolving complex network is suggested and studied by direct simulation. The stationary regime is maintained as a result of the balance between the extremal dynamics, adaptivity of…

Physics and Society · Physics 2009-11-13 D. Horvath , Z. Kuscsik

We introduce a new Self-Organized Criticality (SOC) model for simulating price evolution in an artificial financial market, based on a multilayer network of traders. The model also implements, in a quite realistic way with respect to…

Trading and Market Microstructure · Quantitative Finance 2016-06-30 Alessio Emanuele Biondo , Alessandro Pluchino , Andrea Rapisarda

An agent-based modelling methodology for the joint price evolution of two stocks is put forward. The method models future multidimensional price trajectories reflecting how a class of agents rebalance their portfolios in an operational way…

Mathematical Finance · Quantitative Finance 2025-03-25 Dario Crisci , Sebastian E. Ferrando , Konrad Gajewski

We give a stochastic microscopic modelling of stock markets driven by continuous double auction. If we take into account the mimetic behavior of traders, when they place limit order, our virtual markets shows the power-law tail of the…

Computational Physics · Physics 2009-11-13 Jun-ichi Maskawa

We study an agent-based stock market model with heterogeneous agents and friction. Our model is based on that of Foellmer-Schweizer(1993): The process of a stock price in a discrete-time framework is determined by temporary equilibria via…

Probability · Mathematics 2013-01-29 Takashi Kato

The efficient market hypothesis (EMH) famously stated that prices fully reflect the information available to traders. This critically depends on the transfer of information into prices through trading strategies. Traders optimise their…

Mathematical Finance · Quantitative Finance 2025-01-14 Paolo Barucca , Flaviano Morone

We present results on simulations of a stock market with heterogeneous, cumulative information setup. We find a non-monotonic behaviour of traders' returns as a function of their information level. Particularly, the average informed agents…

Trading and Market Microstructure · Quantitative Finance 2008-12-02 Bence Toth , Enrico Scalas

The high-order complexity of human behaviour is likely the root cause of extreme difficulty in financial market projections. We consider that behavioural simulation can unveil systemic dynamics to support analysis. Simulating diverse human…

Trading and Market Microstructure · Quantitative Finance 2025-06-03 Cheng Wang , Chuwen Wang , Shirong Zeng , Jianguo Liu , Changjun Jiang

The evolution of specialization in a multi-agent system is studied both by computer simulation and Markov process model. Many individual agents search for and exploit resources to get global optimization in an environment without complete…

Adaptation and Self-Organizing Systems · Physics 2007-05-23 Zengru Di , Jiawei Chen , Yougui Wang , Zhangang Han

Artificial stock market simulation based on agent is an important means to study financial market. Based on the assumption that the investors are composed of a main fund, small trend and contrarian investors characterized by four…

Trading and Market Microstructure · Quantitative Finance 2021-09-22 Yong Shi , Bo Li , Guangle Du

In order to simulate the complex phenomena manifested in stock markets, we introduce a continuous asynchronous model in which millions of individual traders interact through a central orders matching mechanism, just as it happens in real…

Statistical Mechanics · Physics 2008-12-02 M. Shatner , L. Muchnik , M. Leshno , S. Solomon

We propose and study the integration of sentiment analysis and deep reinforcement learning ensemble algorithms for stock trading by evaluating strategies capable of dynamically altering their active agent given the concurrent market…

Trading and Market Microstructure · Quantitative Finance 2024-11-21 Andrew Ye , James Xu , Vidyut Veedgav , Yi Wang , Yifan Yu , Daniel Yan , Ryan Chen , Vipin Chaudhary , Shuai Xu

Stock trading is one of the popular ways for financial management. However, the market and the environment of economy is unstable and usually not predictable. Furthermore, engaging in stock trading requires time and effort to analyze,…

Machine Learning · Computer Science 2025-05-20 Yunfei Luo , Zhangqi Duan

We discuss a model of an economic community consisting of $N$ interacting agents. The state of each agent at any time is characterized, in general, by a mixed strategy profile drawn from a space of $s$ pure strategies. The community evolves…

adap-org · Physics 2007-05-23 Vivek S. Borkar , Sanjay Jain , Govindan Rangarajan

In complex financial systems, the sector structure and volatility clustering are respectively important features of the spatial and temporal correlations. However, the microscopic generation mechanism of the sector structure is not yet…

General Finance · Quantitative Finance 2015-04-09 Jun-Jie Chen , Lei Tan , Bo Zheng