Linfeng was born and raised in Qingdao, China. He has bachelor's degrees in accounting and earth science from Sun Yat-sen University. Now he is a graduate student of mathematical geology. He likes table tennis, movies, and traveling. He believes that simples control the world.
Project: The Influence of People's Expectation on the Price in the Currency Exchange Market
In a currency exchange market or a stock market, inside information is sometimes released. The people who know the inside information early can make profits by it. As time goes on, more and more people will know this inside information. Then the information will become useless. If someone still does the same thing (buy, or sell) as those that know the inside information, he will lose heavily. So there should be a turning point in the market where the inside information becomes useless from useful.
How many percent of people who know the inside information at the turning point in the market will be studied in the project. There are three kinds of people in the model, conservatives, middles and conservatives. People who don't know inside information will follow others after asking their neighbors. They are called followers. People who know the inside information will judge according to the inside information, but by not following others. The three kinds of people act a little differently when following others and making decisions, because they have different attitudes and risk tolerance abilities. When the inside information is released, the three different kinds of people who may know the information or not act differently. Inside information transfers at an exponential speed. Price depends on last price, demand, and supply. The model can draw the path of the price and give the percent of people who know the inside information at the turning point of the price. In the real world, the speed of news transmission can be tested. Then the model predicts the turning point of the price. This may be helpful to investors.
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