The effect of investor psychology on the complexity of stock market: An analysis based on cellular automaton model

In this paper, using a developed cellular automaton model of the stock market, variables reflecting fractal and stability properties are introduced to describe complexity in the stock market; the concept of discrete level is defined to characterize market stability. Based on the model, the dependency of market complexity on the investors’ imitation degree is investigated. The results show a clear correlation between investors’ imitation degree and complexity of the stock market.