Evolutionary dynamics in financial markets with heterogeneities in investment strategies and reference points.

In nature and human societies, the effects of homogeneous and heterogeneous characteristics on the evolution of collective behaviors are quite different from each other. By incorporating pair pattern strategies and reference point strategies into an agent-based model, we have investigated the effects of homogeneous and heterogeneous investment strategies and reference points on price movement. In the market flooded with the investors with homogeneous investment strategies or homogeneous reference points, large price fluctuations occur. In the market flooded with the investors with heterogeneous investment strategies or heterogeneous reference points, moderate price fluctuations occur. The coexistence of different kinds of investment strategies can not only refrain from the occurrence of large price fluctuations but also the occurrence of no-trading states. The present model reveals that the coexistence of heterogeneous populations, whether they are the individuals with heterogeneous investment strategies or heterogeneous reference points of stock prices, is an important factor for the stability of the stock market.

Coupled effects of local movement and global interaction on contagion.

By incorporating segregated spatial domain and individual-based linkage into the SIS (susceptible-infected-susceptible) model, we propose a generalized epidemic model which can change from the territorial epidemic model to the networked epidemic model. The role of the individual-based linkage between different spatial domains is investigated. As we adjust the timescale parameter τ from 0 to unity, which represents the degree of activation of the individual-based linkage, three regions are found. Within the region of 0 < τ < 0.02 , the epidemic is determined by local movement and is sensitive to the timescale τ . Within the region of 0.02 < τ < 0.5 , the epidemic is insensitive to the timescale τ . Within the region of 0.5 < τ < 1 , the outbreak of the epidemic is determined by the structure of the individual-based linkage. As we keep an eye on the first region, the role of activating the individual-based linkage in the present model is similar to the role of the shortcuts in the two-dimensional small world network. Only activating a small number of the individual-based linkage can prompt the outbreak of the epidemic globally. The role of narrowing segregated spatial domain and reducing mobility in epidemic control is checked. These two measures are found to be conducive to curbing the spread of infectious disease only when the global interaction is suppressed. A log-log relation between the change in the number of infected individuals and the timescale τ is found. By calculating the epidemic threshold and the mean first encounter time, we heuristically analyze the microscopic characteristics of the propagation of the epidemic in the present model.