The shark game: equilibrium with bounded rationality

  • Lucian Daniel Stanciu-Viziteu
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 662)


We propose an intuitive toy model of a financial market where investors are represented by hungry sharks. Each shark learns the best strategy through a trial and error procedure calibrated to human characteristics. The mix of rewards for eating or not can create a large array of scenarios that can be used to observe the emergence of equilibrium from simple to more realistic situations. Using an agent-based model we create an environment where sharks learn and try to optimize their payoffs. Our preliminary results show that sharks,like investors, can learn to coordinate and generate a equilibrium under rational expectations. We also find cases where equilibrium cannot be found and the situation becomes a minority-type game.


Trading Volume Rational Expectation Bounded Rationality Performance Strength American Economic Association 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  1. 1.CERAG UMR CNRS 5820Grenoble Cedex 9France

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