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Line 42: ==Agent-based modelling== Currently, many of the algorithms assume homogeneous and rational behavior among investors. However, there’s an alternative approach being researched to financial modeling called [[Agent-based model\|agent-based modelling]] (ABM). ABM uses different autonomous agents whose behavior evolves endogenously which lead to complicated system dynamics that are sometimes impossible to predict from the properties of individual agents.<ref>{{cite journal \|last=Brabazon \|first=Anthony \|coauthors=Jiang Dang, Ian Dempsy, Michael O'Neill, and David M. Edelman \|title=Natural Computing in finance: a review \|journal=Handbook of Natural Computing \|year=2010 \|url=http://irserver.ucd.ie/dspace/bitstream/10197/2737/1/NCinFinance_v8.pdf \|deadurl=yes}} {{dead link \|date=September 2013}}</ref> ABM is starting to be applied to computational finance. Though, for ABMs to be more accurate, better models for rule-generation need to be developed. == References ==

IPO underpricing algorithm: Difference between revisions