Biased Trader Model and Analysis of Financial Market Dynamics

Abstract

This study focuses on various trader behaviors that affect market dynamics. in particular, the effects of a covering mechanism, learning mechanism and bias mechanism are analyzed through agent-Based financial market model. an XCS classifier system is used to model trader learning mechanism. a trader model is proposed to formulate a trader decision model that combines bias mechanisms with learning mechanisms. the results reveal that biased traders survive under evolving markets and affect price dynamics. the model contributes to understanding the market behavior and potential sources of deviation from efficient market equilibrium. © 2012 - IOS Press and the authors. All rights reserved.

Department(s)

Engineering Management and Systems Engineering

Keywords and Phrases

Agent based modeling; biased decision making; financial markets; learning classifier systems

International Standard Serial Number (ISSN)

1875-8827; 1327-2314

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2024 IOS Press, All rights reserved.

Publication Date

28 May 2012

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