Life in the Stockmarket - a Realistic Model for Trading

Fabio Franci and Lorenzo Matassini
Additional contact information
Fabio Franci: Max-Planck-Institut fuer Physik komplexer Systeme Dresden
Lorenzo Matassini: Max-Planck-Institut fuer Physik komplexer Systeme Dresden

Papers from arXiv.org

Abstract: We propose a frustrated and disordered many-body model of a stockmarket in which independent adaptive traders can trade a stock subject to the economic law of supply and demand. We show that the typical scaling properties and the correlated volatility arise as a consequence of the collective behavior of agents: With their interaction they determine a price which in turn affects their future way of investing. We introduce only one type of investors, since they all share the same hope: They simply want to maximize the profit minimizing the risk. The best utilization of resources occurs at a critical point characterized by the transition between the excess-demand and the excess-supply phases.

Date: 2000-08
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://arxiv.org/pdf/cond-mat/0008466 Latest version (application/pdf)

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:arx:papers:cond-mat/0008466

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().