Evolutionary Foundation of Bounded Rationality in a Financial Market

2013 ◽  
Vol 17 (4) ◽  
pp. 528-544 ◽  
Author(s):  
Kanta Kinoshita ◽  
Kyoko Suzuki ◽  
Tetsuya Shimokawa
Keyword(s):  
Bounded Rationality ◽  
Financial Market ◽  
Evolutionary Foundation

A Hollow Cultural Core? An Inquiry into New Institutional Approaches to Incentive Based Regulation

2015 ◽  
Vol 56 (1) ◽  
pp. 39-62 ◽  
Author(s):  
Rachel Harvey
Keyword(s):  
Bounded Rationality ◽  
Financial Market ◽  
Rational Action ◽  
Information Asymmetries ◽  
Institutional Perspective ◽  
Market Making ◽  
Insufficient Attention ◽  
Incentive Structures ◽  
Cultural Processes

AbstractThe trans-disciplinary New Institutional framework identifies the importance of incentive structures in preventing opportunism in market making. In recent decades this theoretical tradition has increasingly shifted its attention from formal institutions to identify the significance of cultural processes in countering uncertainty, bounded rationality, and information asymmetries. More specifically the New Institutional perspective tends to focus on the formal mechanisms producing and reproducing culture, as opposed to an examination of specific cultural content. This attention to formal mechanisms means that value-rational action and commitments in market making receive insufficient attention. In order to examine the problems entailed in this trend, the case study of a financial market in which market making was constituted by the values of loyalty, duty, and honor of traders is used.

DETECTING FRACTAL/MULTIFRACTAL AND ASYMMETRIC PROPERTIES IN AN ARTIFICIAL QUOTE-DRIVEN FINANCIAL MARKET

Fractals ◽  
2010 ◽  
Vol 18 (01) ◽  
pp. 87-99 ◽  
Author(s):  
LING-YUN HE ◽  
FENG ZHENG
Keyword(s):  
Time Series ◽  
Ising Model ◽  
Bounded Rationality ◽  
Financial Market ◽  
Psychological Factors ◽  
Complex Dynamics ◽  
Local Information ◽  
Market Liquidity ◽  
Market Model ◽  
Market Maker

In this paper, we detected the fractal/multifractal and asymmetric properties in a simple financial market model which is an analog of the Ising model. We introduced the virtual market with heterogeneous agents characterized by agents with bounded rationality, by which we mean that agents only have local information, and a market maker who is responsible for market liquidity. To investigate the heterogeneity and psychological factors in real financial market, we designed the parameters of individual expectations of agents to this model. Applying fractal/multifractal and Zipf techniques, we conducted many simulations under different scenarios and then analyzed the generated time series of this virtual market. We acquired some nontrivial findings: first, the virtual price returns generated by our model display fractal and multifractal features; secondly, we found that the price have the asymmetric behaviors; finally, our findings have qualitative similarities with many empirical results, which imply that although our toy model is seemingly simple, it can generate complex dynamics and thus can be a useful tool to investigate complex market behaviors and phenomena.

(Un)Bounded Rationality

1985 ◽  
Vol 30 (4) ◽  
pp. 263-265
Author(s):  
Donald E. Broadbent
Keyword(s):  
Bounded Rationality

External Factors of Big Business Transformation in Russia

2005 ◽  
pp. 72-89 ◽  
Author(s):  
Ya. Pappe ◽  
Ya. Galukhina
Keyword(s):  
Financial Market ◽  
Capital Market ◽  
Business Groups ◽  
External Factors ◽  
Big Business ◽  
Business Transformation ◽  
Global Standards ◽  
The World ◽  
Principal Subject

The paper is devoted to the role of the global financial market in the development of Russian big business. It proves that terms and standards posed by this market as well as opportunities it offers determine major changes in Russian big business in the last three years. The article examines why Russian companies go abroad to attract capital and provides data, which indicate the scope of this phenomenon. It stresses the effects of Russian big business’s interaction with the world capital market, including the modification of the principal subject of Russian big business from integrated business groups to companies and the changes in companies’ behavior: they gradually move away from the so-called Russian specifics and adopt global standards.

Russian Banking Sector under World Financial Market Uncertainty: Problems and Prospects

2008 ◽  
pp. 4-19 ◽  
Author(s):  
A. Ulyukaev ◽  
E. Danilova
Keyword(s):  
Emerging Markets ◽  
Financial Market ◽  
Banking Sector ◽  
Financial System ◽  
Local Market ◽  
Market Uncertainty ◽  
Balanced Growth ◽  
Banking Sector Development ◽  
The World ◽  
The Usa

The authors point out that the local market crisis - on the USA substandard loan market - has led to the uncertainty of the world financial market. It has caused the growing demand for liquidity in the framework of the world financial system. The Russian banking sector seems to be more stable under negative changes than banking systems of other emerging markets. At the same time one can assume that the crisis will become the factor of qualitative shift in the character of the Russian banking sector development - the shift from impetuous to more balanced growth.

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