Abstract

In this manuscript, we summarize prior research on the agent-based modeling of financial markets. While extensive research related to agent-based modeling has been done in various economic disciplines, we focus mainly on the evolution of the models and their applications to financial markets. A large number of studies have adopted agent-based modeling methodologies to explain various empirical findings in financial markets. Our summary shows the benefits of using such modeling to account for various financial market phenomena. We confirm that small changes in initial parameter values can lead to relatively large fluctuations through the financial markets that can be viewed as complex or chaotic systems. This also means that financial markets become volatile due to small unexpected changes in the parameters of the models that describe the market.

Details

Title
Agent-based models in financial market studies
Author
Wang, L 1 ; Ahn, K 2 ; Kim, C 3 ; C Ha 4 

 Department of Economics, University of Pittsburgh, 4901 Wesley W. Posvar Hall, 230 South Bouquet Street, Pittsburgh, PA 15260, U.S. 
 Graduate School of Future Strategy, Korea Advanced Institute of Science and Technology, 291 Daehak-ro, Yuseong-gu, Daejeon 34141, Republic of Korea 
 Computational Economics Laboratory, Computational Science Center, Korean Institute of Science and Technology, Hwarangro-14 gil, Seongbuk-gu, Seoul 02792, Republic of Korea. 
 HSBC Business School, Peking University, University Town, Nanshan District, Shenzhen 518055, P.R. China 
Publication year
2018
Publication date
Jun 2018
Publisher
IOP Publishing
ISSN
17426588
e-ISSN
17426596
Source type
Scholarly Journal
Language of publication
English
ProQuest document ID
2572333560
Copyright
© 2018. This work is published under http://creativecommons.org/licenses/by/3.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.