Abstract
There is a discrepancy between the standard view of equilibrium through price adjustment in economics and the observation of large fluctuations in stock markets. We study here a simple model where agents decisions not only depend upon their individual preferences but also upon information obtained from their neighbors in a social network. The model shows that information diffusion coupled to the adjustment process drives the system to criticality with large fluctuations rather than converging smoothly to equilibrium.
Original language | English |
---|---|
Pages (from-to) | 1263-1272 |
Number of pages | 10 |
Journal | International Journal of Modern Physics C |
Volume | 11 |
Issue number | 6 |
DOIs | |
State | Published - Sep 2000 |
Keywords
- Criticality
- Fluctuations
- Percolation
- Power Spectrum
- Sales Dynamics