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Multi-player dynamic game model for Bitcoin transaction bidding prediction

Author

Listed:
  • Yan, Guanghui
  • Wang, Shan
  • Li, Shikui
  • Lu, Binwei

Abstract

With the rapid rise of cryptocurrencies, it has become an urgent problem to realize the flat use of digital currency, with making it really put into use, and giving full play to its utility in the current economic market. This paper innovatively takes the maximization of user benefit as the key point to predict transaction bidding price combining dynamic game theory. The bidding price of user transaction not only refers to historical transactions, but also considers the impact on future subsequences, and the result describes the interaction between transactions in detail. Also this paper proposes a method to express user satisfaction and establishes a user benefit model accordingly, so as to ensure the transaction is packaged successfully to the greatest extent within the acceptable range of transaction pricing. Finally this paper compares the proposed model with conventional machine learning prediction algorithms, finding that when user does not participate in the trading for the first time, the prediction effect of this proposal is better than that of machine learning over small data sets, moreover superior to machine learning methods in prediction accuracy and sensitivity, with a lower time complexity.

Suggested Citation

  • Yan, Guanghui & Wang, Shan & Li, Shikui & Lu, Binwei, 2022. "Multi-player dynamic game model for Bitcoin transaction bidding prediction," The North American Journal of Economics and Finance, Elsevier, vol. 60(C).
  • Handle: RePEc:eee:ecofin:v:60:y:2022:i:c:s1062940821002230
    DOI: 10.1016/j.najef.2021.101631
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bitcoin; Prediction algorithm; Transaction fee; Multi-player dynamic game;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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