Market selection when markets are incomplete

Article Abstract:

A theory of market selection that applies to complete and some incomplete market economies is discussed. Belief accuracy is stated to be a critical factor in determining the fate of agents' wealth. It is concluded that the agents whose beliefs have the highest market entropy will dominate the economy.

Financial markets, Entropy (Information theory)

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Genetic learning as an explanation of stylized facts of foreign exchange markets

Article Abstract:

The Kareken-Wallace model of exchange rate formation in a two-country over-lapping generations world is examined. A dynamic version of the model in which agents' decision rules are updated using genetic algorithms is presented.

Usage, Foreign exchange, Foreign exchange rates, Genetic algorithms, Econometric models

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