A microscopic model of the stock market. Cycles, booms, and crashes

Moshe Levy, Haim Levy*, Sorin Solomon

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

161 Scopus citations

Abstract

We present a model of the stock market based on the behavior of individual investors. Simulations exhibit rich phenomena which include cycles, booms, and crashes. Low dividend yield and more homogeneous market participants are shown to induce crashes.

Original languageAmerican English
Pages (from-to)103-111
Number of pages9
JournalEconomics Letters
Volume45
Issue number1
DOIs
StatePublished - May 1994

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