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Capital flow in a two-component dynamical system

Author

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  • Slanina, František
  • Zhang, Yi-Cheng

Abstract

A model of open economics composed of producers and speculators is investigated by numerical simulations. The capital flows from the environment to the producers and from them to the speculators. The price fluctuations are suppressed by the speculators. When the aggressivity of the speculators grows, there is a transition from the regime with almost sure profit to a very risky regime in which very small fraction of speculators have stable gain. The minimum of price fluctuations occurs close to the transition.

Suggested Citation

  • Slanina, František & Zhang, Yi-Cheng, 1999. "Capital flow in a two-component dynamical system," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 272(1), pages 257-268.
    • Handle: RePEc:eee:phsmap:v:272:y:1999:i:1:p:257-268
    DOI: 10.1016/S0378-4371(99)00272-1
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    Cited by:

    1. Witte, Björn-Christopher, 2011. "Removing systematic patterns in returns in a financial market model by artificially intelligent traders," BERG Working Paper Series 82, Bamberg University, Bamberg Economic Research Group.
    2. Sornette, Didier & Zhou, Wei-Xing, 2004. "Evidence of fueling of the 2000 new economy bubble by foreign capital inflow: implications for the future of the US economy and its stock market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 332(C), pages 412-440.
    3. Groot, Robert D. & Musters, Pieter A.D., 2005. "Minority Game of price promotions in fast moving consumer goods markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 350(2), pages 533-547.

    More about this item

    Keywords

    Stochastic processes; Economics;

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