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Stylized Facts and Agent-Based Modeling

Simon Cramer, Torsten Trimborn

arXiv 2 Dec 2019 · Finance — General

arXiv:1912.02684 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The existence of stylized facts in financial data has been documented in many studies. In the past decade the modeling of financial markets by agent-based computational economic market models has become a frequently used modeling approach. The main purpose of these models is to replicate stylized facts and to identify sufficient conditions for their creations. In this paper we introduce the most prominent examples of stylized facts and especially present stylized facts of financial data. Furthermore, we given an introduction to agent-based modeling. Here, we not only provide an overview of this topic but introduce the idea of universal building blocks for agent-based economic market models.

Citation extraction

78
references
125
in-text mentions
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distinct cited
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Shu-Heng Chen, Chia-Ling Chang, and Ye-Rong Du (2012) Agent-based economic models and econometrics0.87452100%
2Norman Ehrentreich (2007) Agent-based modeling: The Santa Fe Institute artificial stock market model revisited, volume 6020.81142100%
3J Doyne Farmer and Duncan Foley (2009) The economy needs agent-based modelling0.73732100%
4Blake LeBaron (2006) Agent-based financial markets: Matching stylized facts with style0.73732100%
5Thomas Lux (2008) Stochastic behavioral asset pricing models and the stylized facts0.73732100%
6Rod Cross, Michael Grinfeld, Harbir Lamba, and Tim Seaman (2005) A threshold model of investor psychology0.69361100%
7Cars H Hommes (2006) Heterogeneous agent models in economics and finance0.69361100%
8Torsten Trimborn, Philipp Otte, Simon Cramer, Max Beikirch, Emma Pab… (2019) Sabcemm-a simulator for agent-based computational economic market models self0.64441100%
9Avraham Beja and M Barry Goldman (1980) On the dynamic behavior of prices in disequilibrium0.58531100%
10Carl Chiarella, Roberto Dieci, and Laura Gardini (2006) Asset price and wealth dynamics in a financial market with heterogeneous agents0.58531100%

Showing the top 10 of 78 scored citations.