A social network model of investment behaviour in the stock market

To consider the psychological factors that impact market valuation, a model is formulated for investment behaviour of traders whose decisions are influenced by their trusted peers’ behaviour. The model is implemented and several different “trust networks” are tested. Simulation results demonstrate t...

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Bibliographic Details
Published inPhysica A Vol. 389; no. 6; pp. 1223 - 1229
Main Authors Bakker, L., Hare, W., Khosravi, H., Ramadanovic, B.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 15.03.2010
Subjects
Complex system
Delay
Financing
Investment
Investment behaviour
Markets
Networks
Psychological factors
Raw materials
Statistical mechanics
Stock market
Trust network model
Stock market
Investment behaviour
Complex system
Trust network model
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Summary:To consider the psychological factors that impact market valuation, a model is formulated for investment behaviour of traders whose decisions are influenced by their trusted peers’ behaviour. The model is implemented and several different “trust networks” are tested. Simulation results demonstrate that real life trust networks can significantly delay the stabilisation of a market.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0378-4371
1873-2119
DOI:10.1016/j.physa.2009.11.013