IDEAS home Printed from https://ideas.repec.org/h/spr/lnechp/978-3-642-31301-1_9.html
   My bibliography  Save this book chapter

The shark game: equilibrium with bounded rationality

In: Managing Market Complexity

Author

Listed:
  • Lucian Daniel Stanciu-Viziteu

    (CERAG UMR CNRS 5820)

Abstract

We propose an intuitive toy model of a financial market where investors are represented by hungry sharks. Each shark learns the best strategy through a trial and error procedure calibrated to human characteristics. The mix of rewards for eating or not can create a large array of scenarios that can be used to observe the emergence of equilibrium from simple to more realistic situations. Using an agent-based model we create an environment where sharks learn and try to optimize their payoffs. Our preliminary results show that sharks,like investors, can learn to coordinate and generate a equilibrium under rational expectations. We also find cases where equilibrium cannot be found and the situation becomes a minority-type game.

Suggested Citation

  • Lucian Daniel Stanciu-Viziteu, 2012. "The shark game: equilibrium with bounded rationality," Lecture Notes in Economics and Mathematical Systems, in: Andrea Teglio & Simone Alfarano & Eva Camacho-Cuena & Miguel GinĂ©s-Vilar (ed.), Managing Market Complexity, edition 127, chapter 0, pages 103-111, Springer.
  • Handle: RePEc:spr:lnechp:978-3-642-31301-1_9
    DOI: 10.1007/978-3-642-31301-1_9
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tshilidzi Marwala, 2013. "Semi-bounded Rationality: A model for decision making," Papers 1305.6037, arXiv.org.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:lnechp:978-3-642-31301-1_9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.