In this paper we present a methodology of study of complex phenomena emerging in stock markets. This methodology is based on the use of distributed, multi-agent models with minimal knowledge representation and reasoning capabilities that has proven a powerful modeling tool for complex biological systems. Unlike neural and "neo-connectionist" models, ours' allow a comparative and incremental evaluation of their validity and relevance to the observed phenomena. The possibility of their application to the modeling and study of stock market phenomena is demonstrated on a simple example of a central agency that regulates the behavior of the investors : we show how a "blind" or myopic behavioral model reproduces results found in the literature and how the mutation of the model according to the parameters' values or the adaptation structures gives rise to a series of complex phenomena comparable to those observed in reality.
IntroductionWhy do prices fluctuate and under what circumstances is it possible to control them ? What happens if some "irrational" investors enter the market and do they survive ? Is it possible to predict economic crises or other phenomena from observation of a market for a limited period ? The first step to answering any one of these questions is to find suitable economic agent models supporting experimental evidence (excess volatility, survival of technical analysts, etc.) while offering the possibility to control for behavioural investment factors. This paper attempts to build a structure which will allow the researcher to closely simulate real financial markets and highlight their drawbacks and their resilience to shocks.Our methodology is based on the use of distributed, multi-agent models with minimal knowledge representation and reasoning capabilities that has proven a powerful modeling tool for complex biological systems. Unlike neural and "neo-connectionist" approaches, ours' allows a comparative and incremental evaluation of their validity and relevance to the observed phenomena. Algorithmic models rely on the modeler's knowledge about the modeled system, while evolutionary ones rely on the potential to discover structures fit to the systems at hand. While the latter appear more robust to system tuning, the former demonstrate both minimality in respect to the relevant aspects of the problem and incrementality in respect to modeling.Standard financial economics literature is centered around the paradigm of homogeneity. Investors, consumers or traders are supposed to be identical in beliefs. They can vary in wealth endowments (rich and poor), utility functions (risk averse or risk neutral) and information sets (insiders versus the uninformed public) but they all pertain to the same knowledge about the economic environment. Common knowledge of the structure of the market is implicitly assumed and no diverse priors due to biological differences are allowed. In consequence, transactions occur only because of different approaches to risk (hedging) ; common knowledge of differential in...
Abstract-In this work, we are exploring mechanisms that may contribute to cultural dynamics and cultural diversity. To this end, we are experimenting with an extended Axelrod model that uses a Moore neighborhood and heterogeneous sets of cultural features per agent. We are gradually introducing a number of psychologically realistic, basic and more advanced, conceptual models of cultural affinity perception and imitation and show that in many cases the population stabilizes to multi-cultural configurations. We also demonstrate the transitive advantage of two other mechanisms, attraction and spatial migration. In sum, our results show that a mix of initially differentially evolved or developed agents will not converge to monoculture, and that this is due to intrinsic psychological factors that are key players in behavioral change.
Our goal is to integrate traditional artistic media that demand hand dexterity (such as drawing) with intelligent systems techniques that may both constrain and nourish this dexterity. To this end we are experimenting with special brush tools that on top of traditional drawing provide possibilities that involve information processing and behavioral modeling. In this work, we are introducing a behavioral model as a color processing feature of our brush. More precisely, we use a regulation mechanism, that has been shown elsewhere to solve a typical problem in artificial ant societies, to distribute color on the drawing canvas. Our drawing tool, called "AntBrush", manages to create controlled color variety during drawing by regulating its own quantity of color through picking and depositing color on the canvas. Different color effects are possible by controlling the brush's parameters on line.
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