A Evolutionary Game Analyis On Security Traders’ Behavior

Traditional mainstream finance is based on the theory of rational man hypothesis. The frame system of modern finance theory, including the market effective hypothesis, portfolio theory and asset pricing theory, is based on rational man hypothesis. The "reason" investor is just the basic condition of these theories, and the reality of "financial vision" challenges the rationality of mainstream financial theory. Since the1980s, the rise of behavioral finance theory, especially the noise trading theory, opened the investors’"black box" behavior research, the researchers began to study investors’behavior itself. With the idea of biological evolution, the noise trading theory, based on its limited rational analysis framework, can explain the "financial vision" very well. Security market is seen as a evolutionary game system that all kinds of traders interact with each other in certain circumstances. This can better research and analysis the behavioral process of security traders.Based on replicated dynamics equation and frequency dependence Moran process, this paper studies the evolution and dynamic process of investment trading behavior in security market. The paper also studies the evolutionary game process of investor behavior when the market supervision exists. First of all, based on DSSW model, the paper uses replicated dynamics equation to construct evolutionary game model of security traders’behavior. The results show that there exist multiple equilibriums and the evolutionary path and the final equilibrium results are influenced by initial state of the market and relevant parameters about the traders" expected return. Secondly, based on the DSSW model and "eagle-pigeons game" model, the paper uses replicated dynamics equation to construct evolutionary game model of security traders’behavior in security market that exists market supervision. The evolution of the final game still exist multiple equilibriums. There also exists an optimal market supervision make the whole game the system to achieve balanced stable state, which maximize the average expectation return of all traders. Finally, based on the frequency dependence Moran process, the paper constructs evolutionary game model of security traders’behavior in a security market which scope is limited. The numerical simulation analysis shows that the final evolutionary game equilibrium vary with market size.The innovation of this paper lies in that:①This paper uses the stochastic evolution game to study the securities investor behavior. This paper constructs evolutionary game model of security traders’behavior based on frequency dependence Moran process to analysis how market size influence on evolutionary equilibrium.②This paper also studies traders evolutionary game behavior in security market that exists market supervision. This study puts forward a evolutionary game model and numerical simulation results that analyses dynamic development role of traders’behavior in security market. Meanwhile, the study of evolutionary game process of investor behavior when the market supervision exists can make the relevant regulation department better master investors’behavior role to formulate reasonable measures.