The shark game: equilibrium with bounded rationality

Lucian Daniel Stanciu-Viziteu ()
Additional contact information
Lucian Daniel Stanciu-Viziteu: CERAG UMR CNRS 5820

Chapter Chapter 9 in Managing Market Complexity, 2012, pp 103-111 from Springer

Abstract: Abstract We propose an intuitive toy model of a financial market where investors are represented by hungry sharks. Each shark learns the best strategy through a trial and error procedure calibrated to human characteristics. The mix of rewards for eating or not can create a large array of scenarios that can be used to observe the emergence of equilibrium from simple to more realistic situations. Using an agent-based model we create an environment where sharks learn and try to optimize their payoffs. Our preliminary results show that sharks,like investors, can learn to coordinate and generate a equilibrium under rational expectations. We also find cases where equilibrium cannot be found and the situation becomes a minority-type game.

Keywords: Trading Volume; Rational Expectation; Bounded Rationality; Performance Strength; American Economic Association (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-31301-1_9

Ordering information: This item can be ordered from
http://www.springer.com/9783642313011

DOI: 10.1007/978-3-642-31301-1_9

Access Statistics for this chapter

More chapters in Lecture Notes in Economics and Mathematical Systems from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().