Understanding agent-based models of financial markets: A bottom-up approach based on order parameters and phase diagrams

► Possible to identify order parameters in agent-based simulations of financial markets. ► Possible to construct phase diagram of given agent-based model using these order parameters. ► Three phases: (i) dead market, (ii) boom market, and (iii) jammed market in toy models. ► Effect of noise in trading decisions is the expansion of the boom market phase, and disappearance of the dead market phase. ► Antiferromagnetic phase transition between dead and boom markets in deterministic model.