Universal Properties of the General Agent-Based Market Model through Computational Experiments

Abstract

Research goals: to synthesize the general view market mathematical model in accordance with new dynamic paradigm of economics, to reveal the universal properties of general view markets. During our investigation we developed and continuously improved a desktop C# application Model for support the research process using computing experiments. Here our task is revelation of the universal properties of general view market as a result of simulation experiments using this software module. Results of the research: the crucial factors which ensure the market stability are the level of agreement in adaptive expectations and the share of planning with adaptive expectations in a market. The increase of naive expectations leads to stability loss, to bifurcations and finally to chaos in general view market. The increase of number of firms also leads to stability loss and finally to chaos in the general view market at appreciable naive expectations. We revealed that the profits ratio and quantity outputs ratio of firms remains almost unchanged in short-run period in general view markets. It seems an important stability factor of many important real markets for which chaotic dynamics is usual.