A new approach on studying the stability of evolutionary game dynamics for financial systems

Document Type : Research Paper


Control Engineering Department, Faculty of Electrical and Computer Engineering: University of Tabriz, Tabriz, Iran


‎Financial market modeling and prediction is a difficult problem and drastic changes of the price causes nonlinear dynamic that makes the price prediction one of the most challenging tasks for economists‎. ‎Since markets always have been interesting for traders‎, ‎many traders with various beliefs are highly active in a market‎. ‎The competition among two agents of traders‎, ‎namely trend followers and rational agents‎, ‎to gain the highest profit in market is formulated as a dynamic evolutionary game‎, ‎where‎, ‎the evolutionary equilibrium is considered to be the solution to this game‎. ‎The evolutionarily stablity of the equilibrium points is investigated inspite of the prediction error of the expectation‎.