The Interactive Minority Game: a Web based investigation of human market interactions
AbstractThe unprecedented access offered by the World Wide Web brings with it the potential to gather huge amounts of data on human activities. Here we exploit this by using a toy model of financial markets, the Minority Game (MG), to investigate human speculative trading behaviour and information capacity. Hundreds of individuals have played a total of tens of thousands of game turns against computer-controlled agents in the Web-based Interactive Minority Game. The analytical understanding of the MG permits fine-tuning of the market situations encountered, allowing for investigation of human behaviour in a variety of controlled environments. In particular, our results indicate a transition in players' decision-making, as the markets become more difficult, between deductive behaviour making use of short-term trends in the market, and highly repetitive behaviour that ignores entirely the market history, yet outperforms random decision-making.
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Bibliographic InfoPaper provided by EconWPA in its series Experimental with number 0402004.
Length: 13 pages
Date of creation: 23 Feb 2004
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Note: Type of Document - pdf; prepared on WinXP; pages: 13; figures: 5
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Experimental economics and financial markets; Decision theory and game theory; Information theory;
Find related papers by JEL classification:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-29 (All new papers)
- NEP-CBE-2004-02-29 (Cognitive & Behavioural Economics)
- NEP-EXP-2004-02-29 (Experimental Economics)
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