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We present a novel agent-based approach to simulating an over-the-counter (OTC) financial market in which trades are intermediated solely by market makers and agent visibility is constrained to a network topology. Dynamics, such as changes…

Econometrics · Economics 2024-05-07 James T. Wilkinson , Jacob Kelter , John Chen , Uri Wilensky

We attempt to explain stock market dynamics in terms of the interaction among three variables: market price, investor opinion and information flow. We propose a framework for such interaction and apply it to build a model of stock market…

General Finance · Quantitative Finance 2014-09-23 Maxim Gusev , Dimitri Kroujiline , Boris Govorkov , Sergey V. Sharov , Dmitry Ushanov , Maxim Zhilyaev

Building on a prominent agent-based model, we present a new structural stochastic volatility asset pricing model of fundamentalists vs. chartists where the prices are determined based on excess demand. Specifically, this allows for…

Economics · Quantitative Finance 2016-05-02 Radu T. Pruna , Maria Polukarov , Nicholas R. Jennings

We introduce a simple network formation model for social networks. Agents are nodes, connecting to another agent by building a directed edge (or accepting a connection from another agent) has a cost, and reaching (or being reached by) other…

Social and Information Networks · Computer Science 2016-04-22 L. Elisa Celis , Aida Sadat Mousavifar

Urban housing markets, along with markets of other assets, universally exhibit periods of strong price increases followed by sharp corrections. The mechanisms generating such non-linearities are not yet well understood. We develop an…

Computational Finance · Quantitative Finance 2020-04-17 Kirill S. Glavatskiy , Mikhail Prokopenko , Adrian Carro , Paul Ormerod , Michael Harre

An agent-based model is proposed for analyzing the dynamics that arise from interactions within social networks, analyzing the individual behavior of each profile. Said model considers a simplified construction of a social network while…

Social and Information Networks · Computer Science 2019-03-15 Juan Camilo Ramírez de los Rios , Paula Alejandra Escudero Marín , María Camila Vásquez-Correa

The dynamics of systems of interacting agents is determined by the structure of their coupling network. The knowledge of the latter is, therefore, highly desirable, for instance, to develop efficient control schemes, to accurately predict…

Adaptation and Self-Organizing Systems · Physics 2021-10-13 Melvyn Tyloo , Robin Delabays , Philippe Jacquod

A prototype model of stock market is introduced and studied numerically. In this self-organized system, we consider only the interaction among traders without external influences. Agents trade according to their own strategy, to accumulate…

Statistical Mechanics · Physics 2009-10-30 G. Caldarelli , M. Marsili , Y. -C. Zhang

We study the evolution of social clusters, in an analogy with physical spin systems, and in detail show the importance of the concept of the "self" of each agent with quantifiable variable attributes. We investigate the effective influence…

Adaptation and Self-Organizing Systems · Physics 2008-06-03 Fariel Shafee

Behavioral Finance has become a challenge to the scientific community. Based on the assumption that behavioral aspects of investors may explain some features of the Stock Market, we propose an agent based model to study quantitatively this…

General Finance · Quantitative Finance 2017-11-23 F. M. Stefan , A. P. F. Atman

In many problems, agents cooperate locally so that a leader or fusion center can infer the state of every agent from probing the state of only a small number of agents. Versions of this problem arise when a fusion center reconstructs an…

Multiagent Systems · Computer Science 2017-02-10 Stephen Kruzick , Sérgio Pequito , Soummya Kar , José M. F. Moura , A. Pedro Aguiar

In this work we study spin-glass (SG) like behavior in the dynamics of multiple agents in a social or economic context using interactions which are similar to the physical case. The different preferences shown by individual agents are…

Physics and Society · Physics 2007-05-23 Fariel Shafee

In this paper we provide a comprehensive analysis of a structural model for the dynamics of prices of assets traded in a market originally proposed in [1]. The model takes the form of an interacting generalization of the geometric Brownian…

Statistical Finance · Quantitative Finance 2018-06-06 Kartik Anand , Jonathan Khedair , Reimer Kuehn

We present a simple model of a non-equilibrium self-organizing market where asset prices are partially driven by investment decisions of a bounded-rational agent. The agent acts in a stochastic market environment driven by various exogenous…

Computational Finance · Quantitative Finance 2018-05-18 Igor Halperin , Ilya Feldshteyn

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

Securities markets are quintessential complex adaptive systems in which heterogeneous agents compete in an attempt to maximize returns. Species of trading agents are also subject to evolutionary pressure as entire classes of strategies…

Neural and Evolutionary Computing · Computer Science 2019-12-23 David Rushing Dewhurst , Yi Li , Alexander Bogdan , Jasmine Geng

Activity or spin patterns on random scale-free network are studied by mean field analysis and computer simulations. These activity patterns evolve in time according to local majority-rule dynamics which is implemented using (i) parallel or…

Disordered Systems and Neural Networks · Physics 2007-05-23 Haijun Zhou , Reinhard Lipowsky

We present a detailed study of the statistical properties of an Agent Based Model and of its generalization to the multiplicative dynamics. The aim of the model is to consider the minimal elements for the understanding of the origin of the…

Trading and Market Microstructure · Quantitative Finance 2009-11-13 V. Alfi , M. Cristelli , L. Pietronero , A. Zaccaria

Global supply networks in agriculture, manufacturing, and services are a defining feature of the modern world. The efficiency and the distribution of surpluses across different parts of these networks depend on choices of intermediaries.…

General Finance · Quantitative Finance 2019-06-05 Felipe M. Cardoso , Carlos Gracia-Lazaro , Frederic Moisan , Sanjeev Goyal , Angel Sanchez , Yamir Moreno

Maintaining stable internal representations of continuous variables is fundamental for effective robotic control. Continuous attractor networks provide a biologically inspired mechanism for encoding such variables, yet neuromorphic…