Solving dynamic model of information dissemination in capital markets

Abstract

The main reason why companies decide to realize with IPO is to gain access to new funding and they want to signal its quality to the market. The publication presents a model of information dissemination in capital markets. We look upon dissemination of the information as similar to viral infection in epidemiology. The aim of the paper is to use the newly created mathematical apparatus enabling the analysis of dynamic models’ behavior, and more complex and detailed study of their behaviors even if some of the variables respond to stimuli with non-constant time delay. This procedure involves the use of the a priori solution estimate method to design an original solution of boundary value problems for equations (systems) with delay(s) through a sequence of simpler boundary value problems without delay. The results are demonstrated on a specific example and the behavior of the model is presented using a computer simulation.