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The European Physical Journal B

, Volume 63, Issue 4, pp 529–532 | Cite as

The grounds for time dependent market potentials from dealers’ dynamics

Article

Abstract

We apply the potential force estimation method to artificial time series of market price produced by a deterministic dealer model. We find that dealers’ feedback of linear prediction of market price based on the latest mean price changes plays the central role in the market’s potential force. When markets are dominated by dealers with positive feedback the resulting potential force is repulsive, while the effect of negative feedback enhances the attractive potential force.

PACS

89.65.Gh Economics; econophysics, financial markets, business and management 89.75.Fb Structures and organization in complex systems 87.23.Ge Dynamics of social systems 

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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.Department of Computational Intelligence and Systems Science, Interdisciplinary Graduate School of Science and EngineeringTokyo Institute of TechnologyYokohamaJapan
  2. 2.Sony Computer Science Laboratories, Inc.TokyoJapan

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