Abstract
In order to study how the economic system works, it is necessary to study each agent at the micro level and figure out the basic rule of trading behavior.
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Notes
- 1.
W. Kip Viscusi, Joseph E. Harrington, Jr., John M. Vernon, Economics of Regulation and Antitrust, Fourth Edition, pp. 1–2, The MIT Press, 2005.
- 2.
Less Thinking, Better Performance-Training Makes Neymar’s Brain Different, Reference News, 2014-12-11 (B9).
- 3.
Hermann Haken, The Science of Structure: Synergetics, p. 114, Van Nostrand Reinhold, 1984. Haken explains the situation with a mechanical model of a ball in a bowl. “Let the ball be made of steel and the bowl of a relatively soft material. The longer the ball remains ‘undecided’ in the center, the deeper it will sink into the material of the bowl until it is captive in its self-created depression, unable ever to leave it.” This is often the case when people make decisions.
- 4.
The maximization behavioral pattern of the trading agent assumes that the maximization model is adopted by the two types of trading agents. in fact, the maximization model, which is a mathematical method, does not contain normative constraints on behavior. Mathematically, the rule of any process of change can be expressed as the maximization of a function. It is the function itself that constrains the changes. for the behavioral pattern of the trading agent, the key is not maximization, but the object of maximization, that is, the objective function.
- 5.
In 1944, Von Neumann and Morgenstern proposed the theorem of expected utility maximization, which was later developed by Savage in 1953. The theory holds that for decision makers, there exists a real-valued function u. If the probability of action a leading to the occurrence of outcome x is P, and the outcome of action b is y, and it \( {\text{pu }}({\text{x}}) > qu (y) \), the decision maker chooses action a. See Xue Qiuzhi, Huang Peiyan, Lu Zhi, Zhang Xiaorong, Behavioral Economics: Theory and Application, p. 52, Fudan University Press, 2003.
- 6.
Harvey Leibenstein believes that due to the existence of X-inefficiency, enterprises cannot achieve the maximization goal given by neoclassical theory. See Xue Qiuzhi, Huang Peiyan, Lu Zhi, Zhang Xiaorong, Behavioral Economics: Theory and Application, p. 5, p. 27, Fudan University Press, 2003.
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Wang, Z. (2019). Trading Decisions. In: The Principle of Trading Economics. Springer, Singapore. https://doi.org/10.1007/978-981-15-0379-5_6
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DOI: https://doi.org/10.1007/978-981-15-0379-5_6
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