Crowd effects and volatility in markets with competing agents

Neil F Johnson, Michael Hart and P.m Hui

Physica A: Statistical Mechanics and its Applications, 1999, vol. 269, issue 1, 1-8

Abstract: 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.

Keywords: Adaptive systems; Agents; Self-organization (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:269:y:1999:i:1:p:1-8

DOI: 10.1016/S0378-4371(99)00073-4

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