SSCM-Based Simulation of Stock Market: Put Bounded Rational into Social and Stock Environment

Abstract

In this paper, we classify stock simulation environments as cognitive environment, social environment and stock environment. Stock market simulation systems are usually built based on cognitive and social environment, the simulation results are affected by the mental factors and their interaction results. Based on the past researches, this paper presents a Social Stock Competition Model (SSCM) which takes stock environment into consideration, so we can connect bounded rationality with social and stock environment. In SSCM, we simulate the organization information propaganda processes which generate stock related news. The generated news contains stock factors. Stockholder cooperate with the related stockholders in their social network, and make stock exchange decision based on these news and their relations with other stockholders. When stockholder make decision on one stock, they will compete with the other stockholders in stock market. The competition results will decide the price of the stocks.