Crowd effects and volatility in markets with competing agents

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.

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Year of publication:	1999
Authors:	Johnson, Neil F ; Hart, Michael ; Hui, P.M
Published in:	Physica A: Statistical Mechanics and its Applications. - Elsevier, ISSN 0378-4371. - Vol. 269.1999, 1, p. 1-8
Publisher:	Elsevier
Subject:	Adaptive systems \| Agents \| Self-organization

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010664806