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Evolutionary Behavioural Finance

Author

Listed:
  • Igor V. EVSTIGNEEV

    (University of Manchester)

  • Thorsten HENS

    (University of Zürich and Swiss Finance Institute)

  • Klaus Reiner SCHENK-HOPPÉ

    (University of Manchester)

Abstract

The paper reviews a new research field that develops evolutionary and behavioural approaches for the modeling of financial markets. The main objective is to create a plausible alternative to the conventional Walrasian equilibrium theory based on the hypothesis of full rationality of market players. Rather than maximizing typically unobservable individual utility functions, traders/investors are permitted to have a whole variety of patterns of strategic behaviour depending on their individual psychology. The models considered in this field combine elements of evolutionary game theory (solution concepts) and stochastic dynamic games (strategic frameworks).

Suggested Citation

  • Igor V. EVSTIGNEEV & Thorsten HENS & Klaus Reiner SCHENK-HOPPÉ, 2015. "Evolutionary Behavioural Finance," Swiss Finance Institute Research Paper Series 15-16, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp1516
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    File URL: http://ssrn.com/abstract=2615008
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    Cited by:

    1. Giovanni Villani & Marta Biancardi, 2023. "An Evolutionary Game to Study Banks–Firms Relationship: Monitoring Intensity and Private Benefit," Computational Economics, Springer;Society for Computational Economics, vol. 61(3), pages 1075-1093, March.

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