Social Conformity and Price Fluctuation in Artificial Stock Market

The decisions of investors in capital market are based on the predictions of market prices. These predictions are not independent. Instead, they are strongly affected by interactions among investors. This article presents an artificial stock market, which is based on cellular automaton and is able to simulate the transaction rules in China stock market. In this artificial stock market, predictions are the result of both technical analysis and herd behavior. The relationship between different social networks and macroscopic dynamic phenomenon of capital market was studied in this article using this artificial stock market.