Biased trader model and analysis of financial market dynamics

Nil Kilicay-Ergin, David Enke, Cihan Dagli

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


This study focuses on various trader behaviors that affect market dynamics. In particular, the effects of a covering mechanism, learning mechanism and bias mechanism are analyzed through agent-based financial market model. An XCS classifier system is used to model trader learning mechanism. A trader model is proposed to formulate a trader decision model that combines bias mechanisms with learning mechanisms. The results reveal that biased traders survive under evolving markets and affect price dynamics. The model contributes to understanding the market behavior and potential sources of deviation from efficient market equilibrium.

Original languageEnglish (US)
Pages (from-to)99-116
Number of pages18
JournalInternational Journal of Knowledge-Based and Intelligent Engineering Systems
Issue number2
StatePublished - 2012

All Science Journal Classification (ASJC) codes

  • Software
  • Control and Systems Engineering
  • Artificial Intelligence


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