SCL Seminar by Aleksandra Aloric
Scientific Computing Laboratory seminar will be held on Friday, 10 June 2016 at 14:00 in the library reading room “Dr. Dragan Popović" of the Institute of Physics Belgrade. The talk entitled
"Emergence of Cooperative Long-Term Market Loyalty in Double Auction Markets"
will be given by Aleksandra Alorić (King's College London, UK).
Abstract of the talk:
Loyal buyer-seller relationships can arise by design, e.g., when a seller tailors a product to a specific market niche to accomplish the best possible returns, and buyers respond to the dedicated efforts the seller makes to meet their needs. In this talk we will address a question whether it is possible, instead, for loyalty to arise spontaneously, and in particular as a consequence of repeated interaction and co-adaptation among the agents in a market. We will devise a stylized model of discrete-time double auction markets with a global trading price and adaptive agents, who strategize with the choice of market, but their trading strategy is Zero Intelligence. These agents can choose where to trade (which market) and how to trade (to buy or to sell) based on their previous experience. We will find that when the typical scale of market returns (or, at fixed scale of returns, the intensity of choice) become higher than some threshold, the preferred state of the system is segregated: both buyers and sellers are segmented into subgroups that are persistently loyal to one market over another. We will characterize the segregated state analytically in the limit of large markets: it is stabilized by some agents acting cooperatively to enable trade and provides higher rewards than its unsegregated counterpart both for individual traders and the population as a whole. We will conclude with the discussion on the robustness of our results by relaxing simplifying assumptions on agents’ trading strategies and market mechanism, showing that even then the system is stabilized by the emergence of segregation [1].
[1] A. Alorić, et al., PLoS ONE 11, e0154606 (2016).
"Emergence of Cooperative Long-Term Market Loyalty in Double Auction Markets"
will be given by Aleksandra Alorić (King's College London, UK).
Abstract of the talk:
Loyal buyer-seller relationships can arise by design, e.g., when a seller tailors a product to a specific market niche to accomplish the best possible returns, and buyers respond to the dedicated efforts the seller makes to meet their needs. In this talk we will address a question whether it is possible, instead, for loyalty to arise spontaneously, and in particular as a consequence of repeated interaction and co-adaptation among the agents in a market. We will devise a stylized model of discrete-time double auction markets with a global trading price and adaptive agents, who strategize with the choice of market, but their trading strategy is Zero Intelligence. These agents can choose where to trade (which market) and how to trade (to buy or to sell) based on their previous experience. We will find that when the typical scale of market returns (or, at fixed scale of returns, the intensity of choice) become higher than some threshold, the preferred state of the system is segregated: both buyers and sellers are segmented into subgroups that are persistently loyal to one market over another. We will characterize the segregated state analytically in the limit of large markets: it is stabilized by some agents acting cooperatively to enable trade and provides higher rewards than its unsegregated counterpart both for individual traders and the population as a whole. We will conclude with the discussion on the robustness of our results by relaxing simplifying assumptions on agents’ trading strategies and market mechanism, showing that even then the system is stabilized by the emergence of segregation [1].
[1] A. Alorić, et al., PLoS ONE 11, e0154606 (2016).