Research On The Stock Market Behavior Simulation Based On Cellular Automata

The constant development of the financial market brings doubts on the efficient-market hypothesis. The previous researches have found out that not all the investors are rational and their decisions are affected by the government intervention, herding behavior, behavior anomalies and other irrational factors, which causes unstable market price earnings, uneven profit distribution, and nonlinear characteristic of stock price. Therefore, many economists are committed to the research on stock market and focusing their attention on the complex modeling of stock market price.From a holistic perspective, this research aims at a deep analysis of stock market behavior. In the stock market, the investors are influenced by the government intervention, behavior anomalies and other uncertain factors. These uncertain factors make the investors unable to make an accurate and objective prediction. The research will first have a systematic literature review on government behavior, investor behavior and behavior anomalies. Based on the literature review, the feasibility of this research will then be illustrated from the analysis on the features, compositions and applications of cellular automata. Then, this research will integrated the three stock market behaviors: the government behavior investors behavior and behavior anomalies; and after that, it will build and extend the model of stock market behavior with the use of cellular automata, analyze the correlation between the three behaviors and have a critical comment on the extended model. What is followed will be an analysis on the stock market behavior with the method of Matlab experiment model, and a statistical verification with the use of statistical analysis method.The result shows that on the macro-scale, the stocke market behavior and the floating price are positively related and three types of behavior will affect the stock price, which is also the core of various types of behavior; the government regulates the operation of stock market: when the macro-regulation works out towards a good way, the investors’ behavior keeps rational and less affected by behavior anomalies, the floating of stock price would be reduced and the investors will get more profits; however, when the macro-regulation works out otherwise, the floating of stock price would rise and the short-term investors will be affected by the behavior anomalies. But when the stock market has a long-term investment attraction, the decision of the behavior is the leading force, which will enlarge the stock market scale and keep the stability of its operation. In a micro-scale, the proportion of different types of investors differs, and if the proportion of the noise investors rises, the stability of the market will fall.