Semiclosed Pricing Mechanism
Dr.Gurjeet Dhesi, Mohammad Abdul Washad Emambocus, Muhammad Bilal, Shakeel

TL;DR
This paper develops a semi-closed stock market model incorporating news, demand, and supply, modifying classical pricing theories to analyze investor behavior and return distributions.
Contribution
It introduces a novel modified pricing mechanism that integrates news feedback and investor behavior in a semi-closed market setting.
Findings
Modified pricing equation adapts to semi-closed market conditions
Investor behavior varies with news and external influences
Return distributions can be modeled as rational or irrational trajectories
Abstract
This paper aims at designing the different important components of a semi-closed simulated stock market (pricing mechanism, stock allocation and news generation). The purpose is to understand the interactions of the different aspects within a 'semi-closed' system. The complexity and nature of the system led to the process of modifying the pricing mechanism which is viewed from a different angle to the classical Brownian Motion and the Random Walk model. However, it incorporates the essence of these two fundamental theories and then investigates the matrix of investors' behaviours in relation to news feedbacks. This paper also explores the realm of randomly generated news to the responses of participants to determine rational and irrational behaviours. This is carried out through uncompressing the time within the experiment and looking at concordant and disconcordant behaviour. The focus…
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Taxonomy
TopicsComplex Systems and Time Series Analysis · Financial Markets and Investment Strategies · Economic theories and models
