Understanding How Short-Termism and a Dynamic Investor Network Affects Investor Returns: An Agent-Based Perspective

Table 4

Experimental design and result summary.

Model Setting	Key Components	Summary of Findings
Varying network influence (c1) and short-term investors	The initial network for the investors is a lattice network. The parameters varied in the following manner: (i) network influence (c1) ; (ii) percentage of short-term investors [0%, 25%, 50%, 75%, 100%]	The introduction of the short-term investors resulted in greater volatility, and the earlier synchronization of investor strategies, meaning the system tipped into bubble territory earlier. Also, bubbles appeared under conditions that did not previously result in a bubble. Of note was that only a small percentage of short-term investors was required to increase the activity in the system.
Varying network influence (c1), short-term investors, rewiring	As above with the exception that the investor network rewiring occurs in the following increments: (i) steps, meaning rewiring occur: times.	The rewiring process resulted in even more significant variations in the behavior of the system. This conclusion comes from previously dormant markets, those that contained only long-term investors, producing volatile behavior; thereby identifying the fact that the presence of Oracles can destabilize the market; The wealth distribution was extremely skewed under the conditions responsible for severe price movements, with short-term investors gaining off long-term investors.