Evolving trading strategies and financial features

Financial time series exhibit many puzzling features which are not well explained by traditional economic models. However, many of these features are easily reproduced in models of coevolving, heterogeneous agents, following relatively simple trading strategies. This talk will examine several of these features, and show that an agent-based market simulation is able to faithfully replicate many of them. The interactions of traders' strategies and their connections with the emergent macro properties will be explored. The policy and practical applications of this view of market dynamics will be discussed along with its implications beyond finance.