Analyzing the Influence of Overconfident Investors on Financial Markets Through Agent-Based Model
نویسندگان
چکیده
In this research, we employ Agent-Based Modeling to analyze how asset prices are affected by investors’ Behavior. We construct a virtual financial markets that contains several types of investors: fundamentalists and non-fudamentalists. In this analysis, we place focus on the influence of overconfident investors on financial markets. As a result of intensive analysis, we find that overconfident investors are generated in a bottom-up fashion in the market. Furthermore, we also find that overconfident investors have the ability to contribute to market efficiency.
منابع مشابه
Emergence of Overconfidence Investors in Financial Markets
This research utilizes the Agent-Based Model to clarify microscopic and macroscopic links between investor behavior and price fluctuations in the financial market. This analysis places focus on the role that investors’ overconfidence plays in the financial market. As a result of this analysis, it has been found that overconfident investors are generated in a bottomup fashion in the market.
متن کاملThe Effect of Behavioral Factors, the Kind of Information and Transparency of Information on Investor's Behavior in Ahvaz Stock Exchange
ABSTRACT—Today, given the atmosphere of the Iran & world's capital markets, analyzing behavioral factors that influence on the decisions of investors, is very important. This applied study, to evaluate the effect of behavioral factors (biorhythm mode, self-esteem, prestige & rational behavior) and so the kind of information (public & financial) and transparency of information on the investor's ...
متن کاملExploring Investment Strategies in Financial Markets through Agent-based Modeling: Active Investment Strategy and Passive Investment Strategy Exploring Investment Strategies in Financial Markets through Agent-based Modeling: Active Investment Strategy and Passive Investment Strategy
Recent progress of computer technology makes it possible to analyze financial and economic systems through simulation studies. Among them, agent-based modeling is promising. In this paper, using agentbased modeling from distributed artificial intelligence, I discuss the validity of passive investment strategies in financial markets where active investors who hold future information exist. As a ...
متن کاملOverconfident Investors, Predictable Returns, and Excessive Trading
T he last several decades have witnessed a shift away from a fully rational paradigm of financial markets towards one in which investor behavior is influenced by psychological biases. Two principal factors have contributed to this evolution: a body of evidence showing how psychological bias affects the behavior of economic actors; and an accumulation of evidence that is hard to reconcile with f...
متن کاملModeling Investor Optimism with Fuzzy Connectives
Optimism or pessimism of investors is one of the important characteristics that determine the investment behavior in financial markets. In this paper, we propose a model of investor optimism based on a fuzzy connective. The advantage of the proposed approach is that the influence of different levels of optimism can be studied by varying a single parameter. We implement our model in an artificia...
متن کامل