The price of chaos: A new model virtually pits new investors against experienced ones

Variation in expertise and risk-taking behaviors among investors regularly sends markets on roller-coaster rides. Researchers now describe the intricate dynamics driving a financial markets model. Their model takes aim to simulate asset pricing when mixed groups of investors enter a market. By examining bifurcation conditions, they described transitions between different chaotic dynamical regimes. They showed that their model can reflect the nature of real markets by switching between bear and bull dynamics.