Analysis Of Investor's Psychology And Fluctuations Of Stock's Price In Stock Market Based On Cellular Automata

In reality, the decision-making of an investor is very complicated, and the investor's decision-making process will be affected by many factors. In this paper, the conclusion that it's nearly impossible for the investing decision to reach the rational through analysis of both rationality and bounded rationality in the decision-making process. More and more people realize that the subjective factors, such as the behavior and emotion of human-being, play an indispensable part in the decision-making process of financial investment. The traditional Finance Theory faces more and more challenges. As for the complex financial system, many scholars adopt the complex systems, as well as the complex systems simulation, searching for the solution to financial problems. Researchers of Santa Fe Institute think that the finance system consists not only of such in-kind factors such as technologists, various behaviors, market, financial organizations, etc. But also of all kinds of mental factors hiding, which interact with the practical system. And it's just these hiding factors that foster the Macro Economic behavior while impelling the evolution process of the financial market. Thus, the investor's psychology is an important impetus in market evolution, which is also the starting point of my research.Firstly, I make a systematic retrospection on the study of the investor's psychology, an analysis of both the financial complexity and the abnormal of financial market followed with the conclusion that: financial market is a self-organized, self adaptive and complicated system, and there is no rule can offer the investors profits once for all. And, the investor's investing decisions, affected by their moods, psychological fluctuations and former experiences are personal and changeable. So, we should combine the methods of behavioral finance and calculating finance during the study on the financial market.Then, I make use of the DHS model in the behavioral finance, giving an explanation to the investors'overreaction and under-reaction to the stock price and the influence on the stock price for investors'overconfidence. Else, I make an explanation for the Herd Effect with the model of cascaded information, and get the impact on the stock price from the Herd Effect.In the finis, Analysis of Investor's Psychology and Fluctuations of Stock's...