Abstract
In this chapter, market makers and their estimation will be demonstrated as one example of an application using an artificial market. Three kinds of simple market maker models, which decide ask and bid prices by their own positions, are proposed and estimated by acceleration experiments and real-time experiments with human in an artificial market, “U-Mart.” These models can accumulate profits stably or at least keep their profits fluctuating in a narrow range. These results suggest the possibility of developing a market maker algorithm working in the real market to provide enough liquidity.
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