This paper describes the need for understanding the role of financial markets in successful product development in the global context. Agent-based models distinguish themselves by their ability to generate many real world phenomena endogenously, rather than as a result of ad-hoc assumptions. We report on a model of global financial markets employing the following agents: countries, firms, stock traders, country banks, and a global bank. These agents interact with goods, credit, currency, and stock markets. The model endogenously generated quantitative and qualitative features of real economies, including skewed firm sizes, skewed country GNP’s, skewed stock trader portfolio values, and heavy-tailed non-Gaussian firm growth rate, exchange rate fluctuation, and stock return distributions. Multiple runs were performed with different random number generator seeds to investigate the stability or instability of the economies grown by the model. Both stable and unstable country economies were detected. The multiple runs also verified conclusions drawn from analyzing individual runs showing how small countries could be buffeted by fluctuations in larger countries. Such a model can be used by product development organizations to understand the impacts of their product development decisions in the context of dynamic and unpredictable financial markets.
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ASME 2008 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference
August 3–6, 2008
Brooklyn, New York, USA
Conference Sponsors:
- Design Engineering Division and Computers in Engineering Division
ISBN:
978-0-7918-4327-7
PROCEEDINGS PAPER
Role of Agent Based Financial Market Models in Global Product Development Available to Purchase
Mario E. Inchiosa,
Mario E. Inchiosa
NuTech Solutions, Inc., Charlotte, NC
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Bipin Chadha
Bipin Chadha
NuTech Solutions, Inc., Charlotte, NC
Search for other works by this author on:
Mario E. Inchiosa
NuTech Solutions, Inc., Charlotte, NC
Bipin Chadha
NuTech Solutions, Inc., Charlotte, NC
Paper No:
DETC2008-49670, pp. 65-73; 9 pages
Published Online:
July 13, 2009
Citation
Inchiosa, ME, & Chadha, B. "Role of Agent Based Financial Market Models in Global Product Development." Proceedings of the ASME 2008 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference. Volume 3: 28th Computers and Information in Engineering Conference, Parts A and B. Brooklyn, New York, USA. August 3–6, 2008. pp. 65-73. ASME. https://doi.org/10.1115/DETC2008-49670
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