Agent Based and Evolutionary Modeling of Asset Markets

Abstract

We have introduced and discussed two prototype models that go beyond consumption based approaches. Consumption is present in both agent based and evolutionary modeling of asset markets. Yet, at the forefront of those studies are the dynamics of asset returns and volatility. An interesting feature of evolutionary models is the idea of the replicator dynamics, borrowed from mathematical biology and evolutionary game theory according to which both the issue of asset market dynamics as well as wealth distribution in the long run can be addressed. Chap. 15 will consider those issues from the perspective of intertemporal dynamic asset pricing theory, including dynamic consumption decisions, but going beyond the consumption based asset pricing model.