The Minority Game is a physicist's attempt to explain market behaviour 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. It then reviews the main steps in later developments, including both the theory and its applications to market phenomena. 'Minority Games' gives a colourful and stylized, but also realistic picture of how financial markets operate.
- Electronic book text | 361 pages
- 01 Dec 2005
- Oxford University Press
- Oxford, United Kingdom
About Damien Challet
Damien Challet, Mathematical Institute, University of Oxford, Matteo Marsili, ICTP, Trieste, Italy, Yi-Cheng Zhang, Department de Physique, Universite de Fribourg, Switzerland
"Much of the book is devoted to examining the generalizations and extensions of the basic MG idea ... essential reading for those who wish to gain a deep understanding of this idea." -- Dean Rickles, Studies in History and Philosophy of Modern Physics"The book will be useful beyond economics, the philosophy of economics, and the philosophy of physics since it deals in an elementary way with issues of modelling. Therefore, I recommend it as much to philosophers of sciences (looking for some novel case studies and examples) as to philosophers of physics." -- Studies in History and Philosophy of Modern Physics"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