A Culture-Sensitive Agent in Kirman’s Ant Model

  • Shu-Heng Chen
  • Wen-Ching Liou
  • Ting-Yu Chen
Part of the Lecture Notes in Computer Science book series (LNCS, volume 6589)

Abstract

The global financial crisis brought a serious collapse involving a “systemic” meltdown. Internet technology and globalization have increased the chances for interaction between countries and people. The global economy has become more complex than ever before. Mark Buchanan [12] indicated that agent-based computer models will prevent another financial crisis and has been particularly influential in contributing insights. There are two reasons why culture-sensitive agent on the financial market has become so important. Therefore, the aim of this article is to establish a culture-sensitive agent and forecast the process of change regarding herding behavior in the financial market. We based our study on the Kirman’s Ant Model[4,5] and Hofstede’s Natational Culture[11] to establish our culture-sensitive agent based model. Kirman’s Ant Model is quite famous and describes financial market herding behavior from the expectations of the future of financial investors. Hofstede’s cultural consequence used the staff of IBM in 72 different countries to understand the cultural difference. As a result, this paper focuses on one of the five dimensions of culture from Hofstede: individualism versus collectivism and creates a culture-sensitive agent and predicts the process of change regarding herding behavior in the financial market. To conclude, this study will be of importance in explaining the herding behavior with cultural factors, as well as in providing researchers with a clearer understanding of how herding beliefs of people about different cultures relate to their finance market strategies.

Keywords

Culture national culture simulation agent-based model herding conformity 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  • Shu-Heng Chen
    • 1
  • Wen-Ching Liou
    • 2
  • Ting-Yu Chen
    • 2
  1. 1.Department of EconomicsNational Chengchi UniversityTaipeiTaiwan
  2. 2.Department of Management Information SystemNational Chengchi UniversityTaipeiTaiwan

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