Experimental Econophysics: Properties And Mechanisms Of Laboratory Markets (new Economic Windows)

Experimental Econophysics describes the method of controlled human experiments, which is developed by physicists to study some problems in economics or finance, namely, stylized facts, fluctuation phenomena, herd behavior, contrarian behavior, hedge behavior, cooperation, business cycles, partial information, risk management, and stock prediction. Experimental econophysics together with empirical econophysics are two branches of the field of econophysics. The latter one has been extensively discussed in the existing books, while the former one has been seldom touched. In this book, the author will focus on the branch of experimental econophysics. Empirical econophysics is based on the analysis of data in real markets by using some statistical tools borrowed from traditional statistical physics. Differently, inspired by the role of controlled experiments and system modelling (for computer simulations and/or analytical theory) in developing modern physics, experimental econophysics specially relies on controlled human experiments in the laboratory (producing data for analysis) together with agent-based modelling (for computer simulations and/or analytical theory), with an aim at revealing the general cause-effect relationship between specific parameters and emergent properties of real economic/financial markets. This book covers the basic concepts, experimental methods, modelling approaches, and latest progress in the field of experimental econophysics. __Experimental Econophysics__ describes the method of controlled human experiments, which is developed by physicists to study some problems in economics or finance, namely, stylized facts, fluctuation phenomena, herd behavior, contrarian behavior,hedge behavior, cooperation, business cycles, partial information, risk management, and stock prediction. Experimental econophysics together with empirical econophysics are two branches of the field of econophysics. The latter one has beenextensively discussed in the existing books, while the former one has been seldom touched. In this book, the author will focus on the branch of experimental econophysics. Empirical econophysics is based on the analysis of data in real markets by using some statistical tools borrowed from traditional statistical physics. Differently, inspired by the role of controlled experiments and system modelling (for computer simulations and/or analytical theory) in developing modern physics, experimental econophysics specially relies on controlled human experiments in the laboratory (producing data for analysis) together with agent-based modelling (for computer simulations and/or analytical theory), with an aim at revealing the generalcause-effect relationship between specific parameters and emergent properties of real economic/financial markets. This book covers the basic concepts, experimental methods, modelling approaches, and latest progress in the field of experimentaleconophysics. Front Matter....Pages i-xv Introduction....Pages 1-7 Fundamentals....Pages 9-31 Stylized Facts: Scaling Law and Clustering Behavior....Pages 33-44 Fluctuation Phenomena: Leverage Could Be Positive and Negative....Pages 45-62 Herd Behavior: Beyond the Known Ruinous Role....Pages 63-82 Contrarian Behavior: Beyond the Known Helpful Role....Pages 83-98 Hedge Behavior: Statistical Equivalence of Different Systems....Pages 99-114 Cooperation: Spontaneous Emergence of the Invisible Hand....Pages 115-126 Business Cycles: Competition Between Suppliers and Consumers....Pages 127-141 Partial Information: Equivalent to Complete Information....Pages 143-154 Risk Management: Unusual Risk-Return Relationship....Pages 155-166 Prediction: Pure Technical Analysis Might not Work Satisfactorily....Pages 167-180 Summary and Outlook....Pages 181-182 Back Matter....Pages 183-192