Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior
Institutional and individual investors are the two important players in the stock market. Together, they determine the price of the stock market. In this paper, an evolutionary game model that contains the two groups of players is proposed to analyze the stock price synchronicity considering the imp...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2020-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2020/7957282 |
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| author | Yue Dong Yuhao Zhang Jinnan Pan Tingqiang Chen |
| author_facet | Yue Dong Yuhao Zhang Jinnan Pan Tingqiang Chen |
| author_sort | Yue Dong |
| collection | DOAJ |
| description | Institutional and individual investors are the two important players in the stock market. Together, they determine the price of the stock market. In this paper, an evolutionary game model that contains the two groups of players is proposed to analyze the stock price synchronicity considering the impacts of investors’ decisions on stock investment. Factors affecting investors’ decisions include the potential revenue or loss, the probability of gain or loss, and the cost of corresponding behavior. The proposed game model is analyzed by replicator dynamics equations and simulation of the evolutionary equilibrium strategy under different circumstances. The analysis shows that the operating cost of institutional investors, the cost of information collection before trading, and the expected loss that may be punished by regulators are the key factors that affect the evolutionary game system between institutional investors and individual investors. In addition, reducing the speculation in the market and increasing the information access of investors through the serious operation mode of institutional investors and the strengthening of the market information disclosure mechanism are beneficial to alleviate price synchronicity in stock market. |
| format | Article |
| id | doaj-art-e57e9c593923466e8dddc2472a06af3f |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2020-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-e57e9c593923466e8dddc2472a06af3f2025-08-20T03:26:20ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2020-01-01202010.1155/2020/79572827957282Evolutionary Game Model of Stock Price Synchronicity from Investor BehaviorYue Dong0Yuhao Zhang1Jinnan Pan2Tingqiang Chen3School of Economics, Renmin University of China, Beijing 100872, ChinaSchool of Economics and Management, Nanjing Tech University, Nanjing 211816, ChinaSchool of Economics and Management, Nanjing Tech University, Nanjing 211816, ChinaSchool of Economics and Management, Nanjing Tech University, Nanjing 211816, ChinaInstitutional and individual investors are the two important players in the stock market. Together, they determine the price of the stock market. In this paper, an evolutionary game model that contains the two groups of players is proposed to analyze the stock price synchronicity considering the impacts of investors’ decisions on stock investment. Factors affecting investors’ decisions include the potential revenue or loss, the probability of gain or loss, and the cost of corresponding behavior. The proposed game model is analyzed by replicator dynamics equations and simulation of the evolutionary equilibrium strategy under different circumstances. The analysis shows that the operating cost of institutional investors, the cost of information collection before trading, and the expected loss that may be punished by regulators are the key factors that affect the evolutionary game system between institutional investors and individual investors. In addition, reducing the speculation in the market and increasing the information access of investors through the serious operation mode of institutional investors and the strengthening of the market information disclosure mechanism are beneficial to alleviate price synchronicity in stock market.http://dx.doi.org/10.1155/2020/7957282 |
| spellingShingle | Yue Dong Yuhao Zhang Jinnan Pan Tingqiang Chen Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior Discrete Dynamics in Nature and Society |
| title | Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior |
| title_full | Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior |
| title_fullStr | Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior |
| title_full_unstemmed | Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior |
| title_short | Evolutionary Game Model of Stock Price Synchronicity from Investor Behavior |
| title_sort | evolutionary game model of stock price synchronicity from investor behavior |
| url | http://dx.doi.org/10.1155/2020/7957282 |
| work_keys_str_mv | AT yuedong evolutionarygamemodelofstockpricesynchronicityfrominvestorbehavior AT yuhaozhang evolutionarygamemodelofstockpricesynchronicityfrominvestorbehavior AT jinnanpan evolutionarygamemodelofstockpricesynchronicityfrominvestorbehavior AT tingqiangchen evolutionarygamemodelofstockpricesynchronicityfrominvestorbehavior |