An investigation of crash avoidance in a complex system

Michael L. Hart, David Lamper, Neil F Johnson

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

Complex systems can exhibit unexpected large changes, e.g. a crash in a financial market. We examine the large endogenous changes arising within a non-trivial generalization of the minority game: the grand canonical minority game. Using a Markov-Chain description, we study the many possible paths the system may take. This 'many-worlds' view not only allows us to predict the start and end of a crash in this system, but also to investigate how such a crash may be avoided. We find that the system can be 'immunized' against large changes: by inducing small changes today, much larger changes in the future can be prevented.

Original languageEnglish (US)
Pages (from-to)649-661
Number of pages13
JournalPhysica A: Statistical Mechanics and its Applications
Volume316
Issue number1-4
DOIs
StatePublished - Dec 15 2002
Externally publishedYes

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crashes
avoidance
Crash
complex systems
Minority Game
Complex Systems
games
minorities
Markov chains
Financial Markets
Markov chain
Predict
Path

Keywords

  • Agent-based models
  • Complex adaptive systems
  • Econophysics

ASJC Scopus subject areas

  • Mathematical Physics
  • Statistical and Nonlinear Physics

Cite this

An investigation of crash avoidance in a complex system. / Hart, Michael L.; Lamper, David; Johnson, Neil F.

In: Physica A: Statistical Mechanics and its Applications, Vol. 316, No. 1-4, 15.12.2002, p. 649-661.

Research output: Contribution to journalArticle

Hart, Michael L. ; Lamper, David ; Johnson, Neil F. / An investigation of crash avoidance in a complex system. In: Physica A: Statistical Mechanics and its Applications. 2002 ; Vol. 316, No. 1-4. pp. 649-661.
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