An Agent-Based Market Simulation with Social Effects

In this paper an agent-based market has been investigated. To simulate the social effects, the social networks topologies popular in related researches were employed. Here agents choose one belief out of a set of beliefs, i.e. Fundamentalism, trend chasing and interrupting. Agents change their beliefs based on two factors, i.e. previous wealth of their own beliefs and other agents’ beliefs. To change the beliefs, a new opinion formation model was introduced. Here, the different decisions of agents guarantee the heterogeneity in Market. Results show the return for all the social networks met the stylized facts. Also, results reveal the social effects on price movement and market statistics.

Keywords:

Social Effects , Evolution of Beliefs , Opinion Formation , Agent-Based Model