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Peer pressure and Generalised Lotka Volterra models

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  • Richmond, Peter
  • Sabatelli, Lorenzo

Abstract

We develop a novel approach to peer pressure and Generalised Lotka-Volterra (GLV) models that builds on the development of a simple Langevin equation that characterises stochastic processes. We generalise the approach to stochastic equations that model interacting agents. The agent models recently advocated by Marsilli and Solomon are motivated. Using a simple change of variable, we show that the peer pressure model (similar to the one introduced by Marsilli) and the wealth dynamics model of Solomon may be (almost) mapped one into the other. This may help shed light in the (apparently) different wealth dynamics described by GLV and the Marsili-like peer pressure models.

Suggested Citation

  • Richmond, Peter & Sabatelli, Lorenzo, 2004. "Peer pressure and Generalised Lotka Volterra models," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 344(1), pages 344-348.
    • Handle: RePEc:eee:phsmap:v:344:y:2004:i:1:p:344-348
    DOI: 10.1016/j.physa.2004.06.148
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    References listed on IDEAS

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    1. Baxter,Martin & Rennie,Andrew, 1996. "Financial Calculus," Cambridge Books, Cambridge University Press, number 9780521552899, October.
    2. Solomon, Sorin & Richmond, Peter, 2001. "Power laws of wealth, market order volumes and market returns," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 299(1), pages 188-197.
    3. Louzoun, Yoram & Solomon, Sorin, 2001. "Volatility driven market in a generalized Lotka–Voltera formalism," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 302(1), pages 220-233.
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