Agent Base Modeling And Simulation Of Financial Market

Abstract

Forecasting of economy has been difficult over the last 200 years. Financial market( economy) is a complex system. Which is composed of many small elements which act locally but react globally on whole system. Many economist try to predict the financial market on the basis of different models. Recently a model which is called agent base model has been developed .Agent base model is consisting of the heterogeneous agents which are designed to do specific task locally and they can interact with the other agents of system and the environment of system .Each and every agent shows impact and overall system impact is the conclusive impacts of all agents in system. Agent base modeling simulate the financial market through the interaction with different agents which work on the different behavioral rules assigned to them. In this project we are trying to develop an Agent base model which simulate the financial market in which the agents are represented by investors of market. A program and simulation is developed in C++. In this report we also try to explain the irrationality of different investors which solve to different anomalies of financial market. we will discuss the different dynamics of financial market.