NDLI: Risk-Return Relationship in a Complex Adaptive System

Content Provider	PubMed Central
Author	Song, Kunyu An, Kenan Yang, Guang Huang, Jiping
Editor	Chialvo, Dante R.
Copyright Year	2012
Abstract	For survival and development, autonomous agents in complex adaptive systems involving the human society must compete against or collaborate with others for sharing limited resources or wealth, by using different methods. One method is to invest, in order to obtain payoffs with risk. It is a common belief that investments with a positive risk-return relationship (namely, high risk high return and vice versa) are dominant over those with a negative risk-return relationship (i.e., high risk low return and vice versa) in the human society; the belief has a notable impact on daily investing activities of investors. Here we investigate the risk-return relationship in a model complex adaptive system, in order to study the effect of both market efficiency and closeness that exist in the human society and play an important role in helping to establish traditional finance/economics theories. We conduct a series of computer-aided human experiments, and also perform agent-based simulations and theoretical analysis to confirm the experimental observations and reveal the underlying mechanism. We report that investments with a negative risk-return relationship have dominance over those with a positive risk-return relationship instead in such a complex adaptive systems. We formulate the dynamical process for the system's evolution, which helps to discover the different role of identical and heterogeneous preferences. This work might be valuable not only to complexity science, but also to finance and economics, to management and social science, and to physics.
Related Links	http://dx.doi.org/10.1371/journal.pone.0033588
Starting Page	33588
File Format	PDF
ISSN	19326203
e-ISSN	19326203
Journal	PLoS ONE
Issue Number	3
Volume Number	7
Language	English
Publisher	Public Library of Science
Publisher Date	2012-03-01
Access Restriction	Open
Rights Holder	Public Library of Science
Subject Keyword	Biochemistry, Genetics and Molecular Biology(all) Agricultural and Biological Sciences(all) Medicine(all) Research in Higher Education
Content Type	Text
Resource Type	Article
Subject	Multidisciplinary

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
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9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

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