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A Network Simulation of OTC Markets with Multiple Agents
James T. Wilkinson, Jacob Kelter, John Chen, Uri Wilensky
https://arxiv.org/abs/2405.02480 https:/…

A Network Simulation of OTC Markets with Multiple Agents
We present a novel agent-based approach to simulating an over-the-counter (OTC) financial market in which trades are intermediated solely by market makers and agent visibility is constrained to a network topology. Dynamics, such as changes in price, result from agent-level interactions that ubiquitously occur via market maker agents acting as liquidity providers. Two additional agents are considered: trend investors use a deep convolutional neural network paired with a deep Q-learning framework…