We introduce a class of agent-based market models founded upon simple descriptions of investor psychology. Agents are subject to various psychological tensions induced by market conditions and endowed with a minimal ‘personality’. This personality consists of a threshold level for each of...

This paper describes how the Preisach model, with its superposition of hysteresis play operators, can be applied to economic systems. At the micro level economic agents, because of fixed or sunk costs of adjustment, adjust discontinuously to changes in state variables and have different trigger...

We argue that the Soros account of reflexivity does not provide a clear-cut distinction between a social science such as economics and the physical sciences. It is pointed out that the participants who attempt to learn from refutations of conjectures in the Soros world are likely to be haunted...

This paper elucidates hysteresis using a simple model of market entry and exit. A procedure for calculating hysteresis indices for economic time series is outlined. Some preliminary results assess the explanatory power of hysteresis variables in determining the equilibrium rate of unemployment...

In a financial market, for agents with long investment horizons or at times of severe market stress, it is often changes in the asset price that act as the trigger for transactions or shifts in investment position. This suggests the use of price thresholds to simulate agent behavior over much...

We continue an investigation into a class of agent-based market models that are motivated by a psychologically-plausible form of bounded rationality. Some of the agents in an otherwise efficient hypothetical market are endowed with differing tolerances to the tension caused by being in the...