Conceptualization and experimentation of asset market with price manipulation
Authors: Pau Fonseca i Casas, Aarón Montero Montero
Organizations: Universitat Politécnica de Catalunya. Statistics and Operations Research Department. Campus Nord. Jordi Girona 1–3 08034, Barcelona, Spain · Universitat Oberta de Catalunya, Barcelona, Spain
The primary goal of this work is to reproduce the behavior of a human trader, detailing his or her psychological processes to understand the effects of his or her decisions on the final value of an asset. The second goal is to use a formal language to detail this behavior as a tool for improving and simplifying the communication between all actors involved in the project, such as specialists from disciplines as diverse as computing, economics and psychology. As a starting point, we use a paper that shows an experiment that analyzes the influence on other trader's behavior when an agent handler and a trading robot attempt to distort the market. This work reproduces this experiment, using virtual traders that belong to a multi-agent simulation model, showing the feasibility to reproduce complex human behaviors and showing the convenience of use formal and graphical languages to simplify the understanding and the validation of the complex behaviors involved in an economic process.