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The dynamics of interacting markets. First results.

Sallans, Brian and Dorffner, Georg and Karatzoglou, Alexandros (2002) The dynamics of interacting markets. First results. Working Papers SFB "Adaptive Information Systems and Modelling in Economics and Management Science", 83. SFB Adaptive Information Systems and Modelling in Economics and Management Science, WU Vienna University of Economics and Business, Vienna.

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Abstract

The behavior of boundedly rational agents in two interacting markets is investigated. A discrete-time model of coupled financial and consumer markets is described. The integrated model is then used to investigate feedback effects between the coupled markets. In particular, the influence of the financial market on product development is demonstrated. The types of traders present in the financial market is shown to have a large effect on firm behavior and product development. In a financial market where traders favour particular products the firms are shown to develop these favored products instead of more profitable ones. The effect is quite strong despite the only feedback being through a noisy stock price, and despite the fact that only a third of share traders are directly influenced by product position. (author's abstract)

Item Type: Paper
Keywords: Kapitalmarkt / Produktentwicklung / Interaktion / Anlageverhalten / Eingeschränkte Rationalität
Divisions: Departments > Informationsverarbeitung u Prozessmanag. > Produktionsmanagement > Taudes
Departments > Finance, Accounting and Statistics > Statistics and Mathematics
Departments > Marketing > Service Marketing und Tourismus
Departments > Informationsverarbeitung u Prozessmanag. > Informationswirtschaft
Depositing User: Repository Administrator
Date Deposited: 25 Mar 2002 11:38
Last Modified: 14 Sep 2010 23:54
URI: http://epub.wu.ac.at/id/eprint/1520

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