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Non-equilibrium price theories

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  • Helbing, Dirk
  • Kern, Daniel

Abstract

We propose two theories for the formation of stock prices under the condition that the number of available stocks is fixed. Both theories consider the balance equations for cash and several kinds of stocks. They also take into account interest rates, dividends, and transaction costs. The proposed theories have the advantage that they do not require iterative procedures to determine the price, which would be inefficient for simulations with many agents.

Suggested Citation

  • Helbing, Dirk & Kern, Daniel, 2000. "Non-equilibrium price theories," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 287(1), pages 259-268.
    • Handle: RePEc:eee:phsmap:v:287:y:2000:i:1:p:259-268
    DOI: 10.1016/S0378-4371(00)00458-1
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    References listed on IDEAS

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    Cited by:

    1. Alessio Emanuele Biondo & Alessandro Pluchino & Andrea Rapisarda, 2014. "Micro and Macro Benefits of Random Investments in Financial Markets," Papers 1405.5805, arXiv.org.

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