By Thomas Riechmann (auth.)

The e-book is devoted to using genetic algorithms in theoretical financial learn. Genetic algorithms provide the opportunity of overcoming the constraints conventional mathematical tractability places on fiscal examine and hence open new horzions for fiscal idea. The e-book finds shut relationships among the speculation of financial studying through genetic algorithms, dynamic online game thought, and evolutionary economics.
Genetic algorithms are the following brought as metaphors for strategies of social and person studying in economics. The booklet offers an easy description of the fundamental buildings of financial genetic algorithms, via an in-depth research in their operating ideas. a number of recognized monetary types are reconstructed to include genetic algorithms. Genetic algorithms therefore aid to discover really new result of recognized fiscal problems.

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Additional info for Learning in Economics: Analysis and Application of Genetic Algorithms

Example text

The possible points s E [1,2, ... d. The probability of gaining genetic individual k from a population by crossover and selection/reproduction is 46 4. General Analysis of Genetic Algorithms P2 (kin) = (I-X)PI (kin) +XL L 1 L-I Pdiln)PI Uln) L- 1 L J(i,j,k,s). 11) The stochastic process of the two operator algorithm is very similar to the one of the one operator algorithm, especially regarding the impossibility of leaving a homogeneous population. Still, the homogeneous popUlations represent absorbing states of the Markov process underlying the two operator algorithm.

In the example of Fig. 3, if the left parent individual is i and the right parent is j, then the specific operation can be written as 1(i,j,k,4). The result of the function is l(i,j,k,4) = 1. The crossover probability X gives the probability of an individual to be involved within crossover. This means that not every individual participates in crossover, but on the average only a share of X of the population. Moreover, the crossover point is determined by chance. The possible points s E [1,2, ...

With the help of the schema concept, some rough predictions about the expected increase of relatively good schemata in the population can be made. g. Goldberg (1989), Mitchell (1996) or Dawid (1999). For the aim of analysis of economic GAs, the schema theorem is of only minor importance. Thus, there will not further treatment of this theorem in this work. 2 Concepts from Population Genetics The similarity of a number of terms used in both disciplines, GA research and population genetics seems to suggest some close relationship between the disciplines themselves.

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