Abstract
Market theory is often concerned only with centralised markets. In this paper, we consider a market that is distributed over a network, allowing us to characterise spatially (or temporally) segregated markets. The effect of this modification on the behaviour of a market populated by simple trading agents was examined. It was demonstrated that an agent’s ability to identify the optimum market price is positively correlated with its network connectivity. A better connected agent receives more information and, as a result, is better able to judge the market state. The ZIP trading agent algorithm is modified in light of this result. Simulations reveal that trading agents which take account of the quality of the information that they receive are better able to identify the optimum price within a market.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
De Long, J.B., Shleifer, A., Summers, L.H., Waldmann, R.J.: Noise trader risk in financial markets. Journal of Political Economy 98, 703–738 (1990)
Smith, V.L.: An experimental study of competitive market behaviour. Journal of Political Economy 70, 111–137 (1962)
Gode, D.K., Sunder, S.: Allocative efficiency of markets with zero-intelligence traders: Market as a partial substitute for individual rationality. Journal of Political Economy 101, 119–137 (1993)
Cliff, D., Bruten, J.: Minimal-intelligence agents for bargaining behaviors in market-based environments. Technical Report HPL-97-91, Hewlett-Packard Labs, UK (1997)
Gjerstad, S., Dickhaut, J.: Price formation in double auctions. Games and Economic Behavior 22, 1–29 (1998)
Das, R., Hanson, J.E., Kephart, J.O., Tesauro, G.: Agent human interactions in the continuous double auction. In: Nebel, B. (ed.) Proceedings of the International Joint Conference on Artificial Intelligence, pp. 1169–1187. Morgan Kaufmann, San Francisco (2001)
Farmer, J.D., Patelli, P., Zovko, I.I.: The predictive power of zero intelligence in financial markets. Proceedings of the National Academy of Science 102, 2254–2259 (2005)
Wilhite, A.: Bilateral trade and ‘small-world’ networks. Computational Economics 18, 49–64 (2001)
Bell, A.M.: Bilateral trading on a network: a simulation study. In: Working Notes: Artificial Societies and Computational Markets (1998)
Noble, J., Davy, S., Franks, D.W.: Effects of the topology of social networks on information transmission. In: Schaal, S., Ijspeert, A.J., Billard, A., Vijayakumar, S., Hallam, J., Meyer, J.A. (eds.) Eighth International Conference on Simulation of Adaptive Behavior, pp. 395–404. MIT Press, Cambridge (2004)
Widrow, B., Hoff, M.E.: Adaptive switching circuits. IRE WESCON Convention record 4, 96–104 (1960)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2006 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Ladley, D., Bullock, S. (2006). Who to Listen to: Exploiting Information Quality in a ZIP-Agent Market. In: La Poutré, H., Sadeh, N.M., Janson, S. (eds) Agent-Mediated Electronic Commerce. Designing Trading Agents and Mechanisms. AMEC TADA 2005 2005. Lecture Notes in Computer Science(), vol 3937. Springer, Berlin, Heidelberg. https://doi.org/10.1007/11888727_15
Download citation
DOI: https://doi.org/10.1007/11888727_15
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-46242-2
Online ISBN: 978-3-540-46243-9
eBook Packages: Computer ScienceComputer Science (R0)