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Based on criteria of mathematical simplicity and consistency with empirical market data, a stochastic volatility model is constructed, the volatility process being driven by fractional noise. Price return statistics and asymptotic behavior…

概率论 · 数学 2008-12-02 Rui Vilela Mendes , M. J. Oliveira

We provide a general probabilistic framework within which we establish scaling limits for a class of continuous-time stochastic volatility models with self-exciting jump dynamics. In the scaling limit, the joint dynamics of asset returns…

数理金融 · 定量金融 2019-12-02 Ulrich Horst , Wei Xu

In many stochastic games stemming from financial models, the environment evolves with latent factors and there may be common noise across agents' states. Two classic examples are: (i) multi-agent trading on electronic exchanges, and (ii)…

最优化与控制 · 数学 2019-07-24 Dena Firoozi , Peter E. Caines , Sebastian Jaimungal

In both finance and economics, quantitative models are usually studied as isolated mathematical objects --- most often defined by very strong simplifying assumptions concerning rationality, efficiency and the existence of disequilibrium…

综合金融 · 定量金融 2010-10-04 Harbir Lamba

We consider a financial market model which consists of a financial asset and a large number of interacting agents classified into many types. Different types of agents are heterogeneous in their price expectations. Each agent can change its…

概率论 · 数学 2008-12-02 Biao Wu

In this paper we discuss a scaling approach to business fluctuations. Our starting point consists in recognizing that concepts and methods derived from physics have allowed economists to (re)discover a set of stylized facts which have to be…

Large variations in stock prices happen with sufficient frequency to raise doubts about existing models, which all fail to account for non-Gaussian statistics. We construct simple models of a stock market, and argue that the large…

凝聚态物理 · 物理学 2015-06-25 P. Bak , M. Paczuski , M. Shubik

We study the market selection hypothesis in complete financial markets, populated by heterogeneous agents. We allow for a rich structure of heterogeneity: individuals may differ in their beliefs concerning the economy, information and…

投资组合管理 · 定量金融 2012-01-17 Roman Muraviev

Long-range correlation in financial time series reflects the complex dynamics of the stock markets driven by algorithms and human decisions. Our analysis exploits ultra-high frequency order book data from NASDAQ Nordic over a period of…

交易与市场微观结构 · 定量金融 2017-11-10 Martin Magris , Jiyeong Kim , Esa Rasanen , Juho Kanniainen

Various notions of fluctuations exist depending on the way one chooses to measure them. We discuss two extreme cases (continuous measurement versus long inter-measurement times) and we see their relation with entropy production and with…

统计力学 · 物理学 2009-11-05 C. Maes , K. Netocny

In this article we revisit the classic problem of tatonnement in price formation from a microstructure point of view, reviewing a recent body of theoretical and empirical work explaining how fluctuations in supply and demand are slowly…

交易与市场微观结构 · 定量金融 2008-12-02 Jean-Philippe Bouchaud , J. Doyne Farmer , Fabrizio Lillo

The effect of intrinsic channel noise is investigated for the dynamic response of a neuronal cell with a delayed feedback loop. The loop is based on the so-called autapse phenomenon in which dendrites establish not only connections to…

生物物理 · 物理学 2014-12-22 Yunyun Li , Gerhard Schmid , Peter Hanggi , Lutz Schimansky-Geier

What is the dominating mechanism of the price dynamics in financial systems is of great interest to scientists. The problem whether and how volatilities affect the price movement draws much attention. Although many efforts have been made,…

综合金融 · 定量金融 2015-02-04 Lei Tan , Bo Zheng , Jun-Jie Chen , Xiong-Fei Jiang

We develop a tractable macroeconomic model that captures dynamic behaviors across multiple timescales, including business cycles. The model is anchored in a dynamic capital demand framework reflecting an interactions-based process whereby…

综合经济学 · 经济学 2022-09-08 Karl Naumann-Woleske , Michael Benzaquen , Maxim Gusev , Dimitri Kroujiline

Many systems in nature, from ferromagnets to flocks of birds, exhibit ordering phenomena on the large scale. In physical systems order is statistically robust for large enough dimensions, with relative fluctuations due to noise vanishing…

统计力学 · 物理学 2017-04-05 Andrea Cavagna , Irene Giardina , Asja Jelic , Edmondo Silvestri , Massimiliano Viale

According to empirical observations, some pattern formation phenomena in driven many-particle systems are more pronounced in the presence of a certain noise level. We investigate this phenomenon of fluctuation-driven ordering with a…

统计力学 · 物理学 2009-11-07 Dirk Helbing , Tadeusz Platkowski

We explore the effect of discounting and experimentation in a simple model of interacting adaptive agents. Agents belong to either of two types and each has to decide whether to participate a game or not, the game being profitable when…

物理与社会 · 物理学 2009-11-13 Damien Challet , Andrea De Martino , Matteo Marsili

In the information-based approach to asset pricing the market filtration is modelled explicitly as a superposition of signals concerning relevant market factors and independent noise. The rate at which the signal is revealed to the market…

证券定价 · 定量金融 2010-09-21 Dorje C. Brody , Yan Tai Law

The effects of intrinsic noise on stochastic delay systems is studied within an expansion in the inverse system size. We show that the stochastic nature of the underlying dynamics may induce oscillatory behaviour in parameter ranges where…

分子网络 · 定量生物学 2015-05-13 Tobias Galla

In this paper we present a framework for investigating coloured noise in reaction-diffusion systems. We start by considering a deterministic reaction-diffusion equation and show how external forcing can cause temporally correlated or…

定量方法 · 定量生物学 2018-12-03 Michael F Adamer , Heather A Harrington , Eamonn A Gaffney , Thomas E Woolley