Minority Games: Interacting Agents in Financial Markets (Oxford Finance) (Hardcover)

~ (Author), Matteo Marsili (Author), Yi-Cheng Zhang (Author)

Editorial Reviews

Review

"Physicist Challet, and one of his coauthors, Yi-Cheng Zhang, conceived of the Minority Game, a model problem explaining market behavior by the interaction between traders, in 1997. Here, they describe the philosophy behind the model, discuss the El Farol bar problem, and review the main steps in later developments, including both the theory and its applications to market phenomena.. In addition to a primary readership of physicists, the book is written to be accessible to economists and researchers and practitioners in financial markets."--Reference & Research Book News

Product Description

The Minority Game is a physicist's attempt to explain market behavior by the interaction between traders. With a minimal set of ingredients and drastic assumptions, this model reproduces market ecology among different types of traders. Its emphasis is on speculative trading and information flow. The book first describes the philosophy lying behind the conception of the Minority Game in 1997, and includes in particular a discussion about the El Farol bar problem. Then it reviews the main steps in later developments, including both the theory and its applications to market phenomena. This book gives a colorful and stylized, but also realistic picture of how financial markets operate.

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Product Details

• Hardcover: 360 pages
• Publisher: Oxford University Press, USA (January 27, 2005)
• Language: English
• ISBN-10: 0198566409
• ISBN-13: 978-0198566403
• Product Dimensions: 9.4 x 6.7 x 0.9 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon.com Sales Rank: #1,146,618 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

5.0 out of 5 stars Should I, or should I not..., March 16, 2005

By	Professor Joseph L. McCauley "Joseph L. McCauley" (Austria+Texas) - See all my reviews

... go to the bar tonight?

Inspired by Brian Arthur's El Farol Bar Game, the minority Game provided the path for the entry of many statistical physicists into econophysics. Game theory, since the 1980's, has become a large part of economic theory, but is largely restricted to studies of Nash equilibria, which (by Nash's own design) is a neo-classical idea. Economic systems are instead complex, not amenable to any imaginable equilibrium analysis. As Per Bak said, equilibrium is a dead system, like a glass of water at rest. Challet, Marsili, and Zhang are three leading researchers in economics, and are the experts on the Minority Game.

This book begins with a very nice introduction to the main ideas and then includes a compilation of the main papers in the field by the Fribourg Group, who are leaders in the new and growing field of econophysics, and other main players. Physicists will enjoy seeing the tools of statistical mechanics in action in an economic setting, and economists will be encouraged to think outside their equilibrium straightjacket by studying the book. But the full range of topics is covered, Nash equilibria as well as cooperation. the compilation also includes some very nice contributions to finance theory and market efficiency.