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The beneficial role of random strategies in social and financial systems

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  • Alessio Emanuele Biondo
  • Alessandro Pluchino
  • Andrea Rapisarda

Abstract

In this paper we focus on the beneficial role of random strategies in social sciences by means of simple mathematical and computational models. We briefly review recent results obtained by two of us in previous contributions for the case of the Peter principle and the efficiency of a Parliament. Then, we develop a new application of random strategies to the case of financial trading and discuss in detail our findings about forecasts of markets dynamics.

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  • Alessio Emanuele Biondo & Alessandro Pluchino & Andrea Rapisarda, 2012. "The beneficial role of random strategies in social and financial systems," Papers 1209.5881, arXiv.org, revised Jan 2013.
    • Handle: RePEc:arx:papers:1209.5881
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    References listed on IDEAS

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    1. Mantegna,Rosario N. & Stanley,H. Eugene, 2007. "Introduction to Econophysics," Cambridge Books, Cambridge University Press, number 9780521039871, January.
    2. J. B. Satinover & D. Sornette, 2007. "”Illusion of control” in Time-Horizon Minority and Parrondo Games," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 60(3), pages 369-384, December.
    3. Sargent, Thomas J & Wallace, Neil, 1975. ""Rational" Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 241-254, April.
    4. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    5. Benoit Mandelbrot, 2015. "The Variation of Certain Speculative Prices," World Scientific Book Chapters, in: Anastasios G Malliaris & William T Ziemba (ed.), THE WORLD SCIENTIFIC HANDBOOK OF FUTURES MARKETS, chapter 3, pages 39-78, World Scientific Publishing Co. Pte. Ltd..
    6. J. B. Satinover & D. Sornette, 2009. "Illusory versus genuine control in agent-based games," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 67(3), pages 357-367, February.
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    Cited by:

    1. Piekunko-Mantiuk Iwona, 2019. "Parameterized Trade on the Futures Market on the WIG20," Folia Oeconomica Stetinensia, Sciendo, vol. 19(1), pages 114-125, June.
    2. Biondo, Alessio Emanuele & Mazzarino, Laura & Pluchino, Alessandro, 2024. "Trading strategies and Financial Performances: A simulation approach," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    3. Alessandro Pluchino & Alessio. E. Biondo & Andrea Rapisarda, 2018. "Exploring the role of talent and luck in getting success," Papers 1811.05206, arXiv.org.
    4. Tanimoto, Jun & Sagara, Hirokji, 2015. "How the indirect reciprocity with co-evolving norm and strategy for 2 × 2 prisoner’s dilemma game works for emerging cooperation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 438(C), pages 595-602.
    5. L. S. Di Mauro & A. Pluchino & A. E. Biondo, 2018. "A Game of Tax Evasion: evidences from an agent-based model," Papers 1809.08146, arXiv.org.
    6. Malarz, Krzysztof & Kułakowski, Krzysztof, 2021. "Heider balance of a chain of actors as dependent on the interaction range and a thermal noise," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 567(C).
    7. Alessio Emanuele Biondo & Alessandro Pluchino & Andrea Rapisarda & Dirk Helbing, 2013. "Are Random Trading Strategies More Successful than Technical Ones?," PLOS ONE, Public Library of Science, vol. 8(7), pages 1-13, July.
    8. Tanimoto, Jun, 2016. "Enhancement of cooperation in the spatial prisoner’s dilemma with a coherence-resonance effect through annealed randomness at a cooperator–defector boundary; comparison of two variant models," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 462(C), pages 714-724.
    9. Alessio Emanuele Biondo & Alfio Giarlotta & Alessandro Pluchino & Andrea Rapisarda, 2016. "Perfect Information vs Random Investigation: Safety Guidelines for a Consumer in the Jungle of Product Differentiation," PLOS ONE, Public Library of Science, vol. 11(1), pages 1-26, January.
    10. Biondo, A.E. & Pluchino, A. & Rapisarda, A., 2018. "Modeling surveys effects in political competitions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 503(C), pages 714-726.
    11. Alessandro Pluchino & Alessio Emanuele Biondo & Andrea Rapisarda, 2018. "Talent Versus Luck: The Role Of Randomness In Success And Failure," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 21(03n04), pages 1-31, May.
    12. Biondo, Alessio Emanuele, 2017. "Learning to forecast, risk aversion, and microstructural aspects of financial stability," Economics Discussion Papers 2017-104, Kiel Institute for the World Economy (IfW Kiel).
    13. Agnieszka Kowalska-Styczeń & Krzysztof Malarz, 2020. "Noise induced unanimity and disorder in opinion formation," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-22, July.
    14. Caserta, Maurizio & Pluchino, Alessandro & Rapisarda, Andrea & Spagano, Salvatore, 2021. "Why lot? How sortition could help representative democracy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 565(C).

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