THE EFFECT OF DIFFERENT NEEDS, DECISION- MAKING PROCESSES AND NETWORK- STRUCTURES ON INVESTOR BEHAVIOR AND STOCK MARKET DYNAMICS: A SIMULATION APPROACH

Striking investor and stock market behaviour have been recurrent items in the worldwide press for the recent past. Crashes and hypes like the Internet bubble are often hard to explain using existing finance frameworks. Therefore, the authors provide a complementing multi-theoretical framework that is built on existing finance research to describe and explain investor’s behaviour and stock market dynamics. This framework is built on three main components: needs, decision making theory, and (social) network effects. This framework will be used to build a future simulation model of investor behaviour and to generate stock market dynamics. A brief outline of the design of these simulation experiments will be given