publication . Preprint . 2021

Complex decision-making strategies in a stock market experiment explained as the combination of few simple strategies

Poux-Medard, Gael; Cobo-Lopez, Sergio; Duch, Jordi; Guimera, Roger; Sales-Pardo, Marta;
Open Access English
  • Published: 09 Mar 2021
Abstract
Many studies have shown that there are regularities in the way human beings make decisions. However, our ability to obtain models that capture such regularities and can accurately predict unobserved decisions is still limited. We tackle this problem in the context of individuals who are given information relative to the evolution of market prices and asked to guess the direction of the market. We use a networks inference approach with stochastic block models (SBM) to find the model and network representation that is most predictive of unobserved decisions. Our results suggest that users mostly use recent information (about the market and about their previous dec...
Subjects
free text keywords: Quantitative Finance - General Finance, Computer Science - Social and Information Networks, Physics - Physics and Society, Statistics - Applications
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39 references, page 1 of 3

1. Guimera, R., Danon, L., D az-Guilera, A., Giralt, F., Arenas, A.: Self-similar community structure in a network of human interactions. Phys. Rev. E 68, 065103 (2003)

2. Kossinets, G., Watts, D.J.: Empirical analysis of an evolving social network. Science 311(5757), 88{90 (2006). doi:10.1126/science.1116869. https://science.sciencemag.org/content/311/5757/88.full.pdf [OpenAIRE]

3. Gonzalez, M.C., Hidalgo, C., Barabasi, A.-L.: Understanding individual human mobility patterns. Nature 453, 779{82 (2008). doi:10.1038/nature06958

4. Candia, J., Gonzalez, M.C., Wang, P., Schoenharl, T., Madey, G., Barabasi, A.-L.: Uncovering individual and collective human dynamics from mobile phone records. Journal of Physics A: Mathematical and Theoretical 41(22), 224015 (2008). doi:10.1088/1751-8113/41/22/224015

5. Schneider, C.M., Belik, V., Couronne, T., Smoreda, Z., Gonzalez, M.C.: Unravelling daily human mobility motifs. Journal of The Royal Society Interface 10(84), 20130246 (2013). doi:10.1098/rsif.2013.0246. https://royalsocietypublishing.org/doi/pdf/10.1098/rsif.2013.0246 [OpenAIRE]

6. Poncela-Casasnovas, J., Gutierrez-Roig, M., Gracia-Lazaro, C., Vicens, J., Gomez-Garden~es, J., Perello, J., Moreno, Y., Duch, J., Sanchez, A.: Humans display a reduced set of consistent behavioral phenotypes in dyadic games. Sci. Adv. (2016)

7. Pentland, A., Liu, A.: Modeling and prediction of human behavior. Neural computation, 229{242 (1999) [OpenAIRE]

8. Ziebart, B.D., Maas, A., Bagnell, J.A., Dey, A.K.: Human behavior modeling with maximum entropy inverse optimal control. AAAI Conference on Arti cial Intelligence, 1433{1438 (2008)

9. Saramaki, J., Leicht, E.A., Lopez, E., Roberts, S.G.B., Reed-Tsochas, F., Dunbar, R.I.M.: Persistence of social signatures in human communication. Proceedings of the National Academy of Sciences 111(3), 942{947 (2014). doi:10.1073/pnas.1308540110. https://www.pnas.org/content/111/3/942.full.pdf [OpenAIRE]

10. Godoy-Lorite, A., Guimera, R., Sales-Pardo, M.: Long-term evolution of email networks: Statistical regularities, predictability and stability of social behaviors. PLOS ONE 11(1), 1{11 (2016). doi:10.1371/journal.pone.0146113

11. Hofman, J.M., Sharma, A., Watts, D.J.: Prediction and explanation in social systems. Science 355(6324), 486{488 (2017). doi:10.1126/science.aal3856. https://science.sciencemag.org/content/355/6324/486.full.pdf

12. de Montjoye, Y., Hidalgo, C., M., V., Blondel, V.D.: Unique in the crowd: The privacy bounds of human mobility. Sci Rep 1376(3) (2013). doi:10.1038/srep01376

13. Messick, D.M., McClintock, C.G.: Motivational bases of choice in experimental games. Journal of Experimental Social Psychology (1967)

14. Fehr, E., Schmidt, K.M.: A theory of fairness, competition, and cooperation. The Quarterly Journal of Economics 114, 817{868 (1999) [OpenAIRE]

15. Cobo-Lopez, S., Godoy-Lorite, A., Duch, J., Sales-Pardo, M., Guimera, R.: Optimal prediction of decisions and model selection in social dilemmas using block models. EPJ Data Science 7(1), 48 (2018). doi:10.1140/epjds/s13688-018-0175-3

39 references, page 1 of 3
Abstract
Many studies have shown that there are regularities in the way human beings make decisions. However, our ability to obtain models that capture such regularities and can accurately predict unobserved decisions is still limited. We tackle this problem in the context of individuals who are given information relative to the evolution of market prices and asked to guess the direction of the market. We use a networks inference approach with stochastic block models (SBM) to find the model and network representation that is most predictive of unobserved decisions. Our results suggest that users mostly use recent information (about the market and about their previous dec...
Subjects
free text keywords: Quantitative Finance - General Finance, Computer Science - Social and Information Networks, Physics - Physics and Society, Statistics - Applications
Download from
39 references, page 1 of 3

1. Guimera, R., Danon, L., D az-Guilera, A., Giralt, F., Arenas, A.: Self-similar community structure in a network of human interactions. Phys. Rev. E 68, 065103 (2003)

2. Kossinets, G., Watts, D.J.: Empirical analysis of an evolving social network. Science 311(5757), 88{90 (2006). doi:10.1126/science.1116869. https://science.sciencemag.org/content/311/5757/88.full.pdf [OpenAIRE]

3. Gonzalez, M.C., Hidalgo, C., Barabasi, A.-L.: Understanding individual human mobility patterns. Nature 453, 779{82 (2008). doi:10.1038/nature06958

4. Candia, J., Gonzalez, M.C., Wang, P., Schoenharl, T., Madey, G., Barabasi, A.-L.: Uncovering individual and collective human dynamics from mobile phone records. Journal of Physics A: Mathematical and Theoretical 41(22), 224015 (2008). doi:10.1088/1751-8113/41/22/224015

5. Schneider, C.M., Belik, V., Couronne, T., Smoreda, Z., Gonzalez, M.C.: Unravelling daily human mobility motifs. Journal of The Royal Society Interface 10(84), 20130246 (2013). doi:10.1098/rsif.2013.0246. https://royalsocietypublishing.org/doi/pdf/10.1098/rsif.2013.0246 [OpenAIRE]

6. Poncela-Casasnovas, J., Gutierrez-Roig, M., Gracia-Lazaro, C., Vicens, J., Gomez-Garden~es, J., Perello, J., Moreno, Y., Duch, J., Sanchez, A.: Humans display a reduced set of consistent behavioral phenotypes in dyadic games. Sci. Adv. (2016)

7. Pentland, A., Liu, A.: Modeling and prediction of human behavior. Neural computation, 229{242 (1999) [OpenAIRE]

8. Ziebart, B.D., Maas, A., Bagnell, J.A., Dey, A.K.: Human behavior modeling with maximum entropy inverse optimal control. AAAI Conference on Arti cial Intelligence, 1433{1438 (2008)

9. Saramaki, J., Leicht, E.A., Lopez, E., Roberts, S.G.B., Reed-Tsochas, F., Dunbar, R.I.M.: Persistence of social signatures in human communication. Proceedings of the National Academy of Sciences 111(3), 942{947 (2014). doi:10.1073/pnas.1308540110. https://www.pnas.org/content/111/3/942.full.pdf [OpenAIRE]

10. Godoy-Lorite, A., Guimera, R., Sales-Pardo, M.: Long-term evolution of email networks: Statistical regularities, predictability and stability of social behaviors. PLOS ONE 11(1), 1{11 (2016). doi:10.1371/journal.pone.0146113

11. Hofman, J.M., Sharma, A., Watts, D.J.: Prediction and explanation in social systems. Science 355(6324), 486{488 (2017). doi:10.1126/science.aal3856. https://science.sciencemag.org/content/355/6324/486.full.pdf

12. de Montjoye, Y., Hidalgo, C., M., V., Blondel, V.D.: Unique in the crowd: The privacy bounds of human mobility. Sci Rep 1376(3) (2013). doi:10.1038/srep01376

13. Messick, D.M., McClintock, C.G.: Motivational bases of choice in experimental games. Journal of Experimental Social Psychology (1967)

14. Fehr, E., Schmidt, K.M.: A theory of fairness, competition, and cooperation. The Quarterly Journal of Economics 114, 817{868 (1999) [OpenAIRE]

15. Cobo-Lopez, S., Godoy-Lorite, A., Duch, J., Sales-Pardo, M., Guimera, R.: Optimal prediction of decisions and model selection in social dilemmas using block models. EPJ Data Science 7(1), 48 (2018). doi:10.1140/epjds/s13688-018-0175-3

39 references, page 1 of 3
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