Interaction Of Market Participants Research Articles

Ethnomethodology Approach in Investment Decision Making in Islamic Capital Market: An Interaction and Social Practice of Market Participants

This study aims to investigate and analyze social interactions and social practices underlying investment decision-making in the Islamic capital market. The research focus includes an understanding of how Islamic values are reflected in the interaction of market participants, the communication practices used, and the impact of social context on investment decision-making. This research uses qualitative methods with an ethnomethodological approach through participatory observation, in-depth interviews, and document analysis. Researchers are involved in the daily activities of market participants, whether on the stock exchange, Islamic finance seminars, or investment forums. In-depth interviews were conducted with investors, brokers, and Islamic finance experts to gain a more in-depth perspective. The document analysis includes a study of Islamic finance literature, fatwas, and related documents. The results showed that social interaction and social practices of market participants have a significant role in making investment decisions in the Islamic capital market. Communication practices based on Islamic values play a key role in the decision-making process. The social and cultural context also influences investors’ perceptions and preferences towards Islamic financial instruments. These findings provide deep contextual insights into the factors influencing investment decisions in Islamic capital markets, which can be the foundation for the development of Islamic ethics-based investment strategies.

Securities Custody Services: International Experience

The relevance of the study is explained by the underdevelopment of the securities market in Ukraine, which barely started establishing the institutions and mechanisms of a market economy. Ukraine has a decentralised system of depository services, which hinders the development of the stock market, because the decentralised system of accounting for rights to securities complicates the procedure of transactions and increases risks. The purpose of the study was to investigate the international experience of securities depository in the rapidly expanding securities markets, especially in Eastern Europe and Asia, their technology, identifying their new functionality and dominant models of their architecture in the context of regulation, interaction of market participants and protection of their property rights. The main methods of study of international experience in the provision of securities custody services were empirical, analytical, and inductive methods, which together allowed describing the systems of securities circulation in different countries, analysing them to identify common features that are important for their implementation in Ukraine for integration into the global system of redistribution of financial resources. The study considered various securities storage systems, national depository systems, covered the features of national mechanisms of interconnection of all participants in the securities market, identified conceptual problems of securities market organisation in Ukraine, substantiated the need to adapt international experience for institutional development of the national depository system of Ukraine. The materials of the study have practical value for the development of the depository system in Ukraine as a basis for the functioning of the securities market, compatible with technological international depository systems in full functionality, which guarantees investors' property rights and enables Ukraine to become a full-fledged redistributor of global financial resources and, accordingly, to attract investments for economic development pursuant to international rules and standards of “transparent” functioning of securities markets, thus putting institutional barriers to corruption influences. The comparative analysis of depository systems of different countries allowed covering weaknesses in the existing depository system of Ukraine, outlining the conceptual approaches to legislative and organisational actions on its development

Research on the impact of digital platforms on the business model of an organization

The area of research presented in the article are digital platforms. The platform approach, the platform economy, which primarily ensures the interaction of market participants, is gaining an increasing number of participants and is becoming more widespread in various industries: from trade to the hotel business and education.The article analyses the impact of the platform approach on the business model of the organization, namely, on the ability to create consumer value and deliver it to its customers, using the advantages of this approach. The ongoing transformation is more based on information technology, human capital, analytical decision-making tools, and business process flexibility. The paper also analyses the experience related to the implementation of the platforms in various countries and organizations.The study gives a possible business model of a platform organization and a University that has implemented platform solutions. The authors note that the mistakes made during the implementation of the platform are mostly due to the human factor: employees may not be ready for changes or are not technically educated enough. The indifference of managers also plays a role, because the risks arising from this are neutralized worse than others. To reduce the risks, the authors defined the directions of further research.

ОСОБЕННОСТИ ПРИМЕНЕНИЯ ТЕОРИИ ИГР В ЭКОНОМИЧЕСКОЙ ДЕЯТЕЛЬНОСТИ ХОЗЯЙСТВУЮЩИХ СУБЪЕКТОВ

Today, there are a huge number of different tools that help reduce risks, but the problem is that they rely on classical probability theory, statistics, etc. These methods can be effective, but they do not take into account the interaction of market participants, psychological characteristics. These problems entail an increase in risks and, as a result, a drop in income and other difficulties. Often, to solve such problems, a business analyst turns to such a branch of mathematics as game theory. Game theory refers to a mathematical method that looks for optimal strategies in the course of a game, and a game refers to a situation in which there are two or more participants who are fighting to defend their interests. A special advantage of game theory is to take into account the struggle of interests of each party, this helps to better understand the current situation and find the optimal solution plan for the real processes taking place in the economy of an economic entity.

Platform Capitalism as a Source of Digital Rentier’s Superprofit Remembering Évian and Bermuda Conferences

The need for a critical understanding of digitalization in the modern economic structure led to the research relevance. The author’s hypothesis about the predominance of platform capitalism in modern economic relations based on K. Marx’s theory is formulated. The authors believe that the «digital economy» concept does not reflect the essence of the processes in terms of the theory of capitalist development, economic interaction, the dilemma solution of coordination and competition in the economy. Significant indications of the modern economy identification are the platforming and distributing, revealing not technical solutions, but features of economic interaction and priority of management decisions. The distributing is focused on the advantages of the Small Data digital economy, based on the market freedom, market relations and independence of market agents; the platforming characterizes the possibilities of digitalization to reduce transaction costs and monetization of communication relations. The key indication of platform capitalism is the markets design («design of matching markets» by A. Roth) that operate on the basis of digital platforms and provide communication and interaction of market participants. The key elements that modernize the classical understanding of capitalism are identified: 1) the transfer of services to a new sphere – the platform, with the max complete cycle, including payment; 2) the change in the form of hiring workers to provide services – through the platform, including part-time employment; 3) the main source of profit, as well as the object of the operation, becomes information, and then info-communication. An original approach to the identification of platform capitalism as an economic system in which economic agents carry out property ownership on the platforms basis, transferring the organizing process to the contractor, distancing themselves from direct participation in the process and receiving rent from the accumulated by the platform information data and communication solutions is proposed. The possibility of rent from information and channels of its distribution analysis allowed to identify the subject of investment relations – the digital rentier, which receives the main income from investments in the objects of the digital economy – platforms, which have already monetized the usefulness of the presented functionality and data. The authors proved that the limitations of the ability to business control should lead to the fact that the expected return rate from the digital platform’s investments of the rentier should be significantly higher than for the shareholder. The article is debatable, the provisions and conclusions require further research.

The Concept and Models of the Cryptocurrency Market

In recent years, there has been an intensive market formation process which involves interrelations of various cryptocurrencies and other financial tools formed on the basis of cryptoplatforms. This process is fraught with numerous difficulties relating to determining the status of these new tools in the legal sphere of relations among market participants. However, the key role consists in the identification of the economic content of cryptotools. The purpose of the present article is to substantiate the proposals on the economic essence of cryptotools and the resulting models of their market formation. The article deals with the economic aspects of cryptotools and suggests possible models of their markets. Currently, in cryptocurrency market formation, the evolutionary path is dominated. Therefore, the article discusses the main tendencies characteristic of this development path. However, the authors also emanate from the necessity of cryptocurrency market formation under the regulating influence of the state and give recommendations on the cryptocurrency market formation based on the interaction of market participants with regulating bodies of state power. It is this approach that allows minimizing financial risks for investors, providing stability of money circulation and macroeconomic resilience, creating favorable conditions for this market to take the proper place in the contemporary economy, and in the digitalization processes occurring in the economy. 

Modelling of innovative development of companies

The authors investigated the problems of innovative development of Russian enterprises. To solve these problems, the conceptual model of innovative development of the enterprise, based on an innovative system of vertical and horizontal interaction of market participants. Particular attention is paid to the characteristics of innovative development tools whose effectiveness can be evaluated on the impact on the innovative activity of the enterprise, and, consequently, its innovative development. Among the innovative development tools identified: human capital development tools and corporate growth management tools, organizational and economic management tools, management tools of scientific and technical potential of the enterprise.

THE INFLUENCE OF ARCHETYPES ON SOCIAL TRANSFORMATIONS

The vision of social transformations, which is a component of the stage of modernization of society, is presented. It is proposed to consider the influence of archetypes on social transformations through the formation of an archetypical and institutional mechanism for regulating socio-economic relations, which is proposed to be considered as an ordered set of institutional levers, incentives and measures aimed at ensuring the effective use of archetypes on the basis of a combination of factors of the micro- and macroeconomic environment by means of public administration. The emphasis is placed on the strengthening of the role of state and supra-national regulatory archetypical-institutional entities in the design of social transformations. Based on the existing theoretical and conceptual provisions for determining the content of the process of institutionalization of archetypes, it has been determined that the mechanism of regulation of institutional transformations of the national market should be considered in three main aspects, corresponding to the economic and social nature of the inter-subjective interaction of market participants. It is noted that the system-reflexive paradigm of regulation of the development and management of transformational changes of complex open socio-economic systems is based on the definition of the active nature of the influence of archetypes, subjects, as well as the reflexive procedures of their interaction, both on the choice of directions and ways of implementation, and on the dynamics of the flow of these processes. The composition of the main provisions that determine the feasibility of using a system of reflexive paradigm in the field of regulation of socio-economic relations, includes a set of assumptions. The main provisions defining the expediency of using the system-reflexive paradigm in the sphere of regulation of socio-economic relations are determined. It is established that the main institutional conflicts are manifestations of inconsistency between archetypes and elements of institutional environment.

THE SYSTEM PARADIGM AS THE RESEARCH METHODOLOGY OF THE CREDIT MARKET

Introduction. The importance of facing the country’s strategic objectives makes it necessary to make more active use of the entire spectrum of credit and financial relations, in particular, leads to the enhancement of the role of the credit market, which currently present a number of challenges. Despite the fact that the term “credit market” is widely used by practitioners and economists, the theoretical foundations, revealing the contents of the credit market in the scientific literature insufficiently developed. Moreover, economists differ in defining its content and constituent elements. There is a need for a theoretical study of the credit market as an integrated system, provide the basis for the search of practical solutions. Purpose. To investigate the Russian credit market as a developing social-economic system, relatively isolated in space and relatively stable in time, which has both the properties of external integrity and internal variety. To determine the driving force of its development. Methods . A study of the credit market as an integrated system was based on the system paradigm, proposed by J. Kornai and comprehensively developed by G. B. Kleiner. Results. The use of a system paradigm allowed to investigate the credit market as an integrated system, to define process system as dominant and to formulate its mission, which is providing constant modernization of the means and opportunities for effective interaction of market participants by balancing the demand for credit products and supply, increases the capacity of the credit market, its proportionality, and promoting competition. The system approach allowed also to prove that the credit market develops under the influence of internal forces, and under the influence of dynamically changing environment, and appropriate management decisions. Prospects. The results of theoretical research of the credit market on the basis of methodological approaches determined by the system paradigm can form the direction of its comprehensive modernization, including the modernization of regulation of the credit market, creating market institutions and socio-economic development of the country. Conclusions. A study of the credit market as a developing integrated socio-economic system, identified process system as the main driving force of its development and also to disclose the significant influence of the environment and the regulatory system on the credit market. Thus the purpose of the article was achieved.

Market ecologies: The effect of information on the interaction and profitability of technical trading strategies

Technical trading strategies make profits by identifying and exploiting patterns in market prices—patterns generated by the interaction of market participants. Using a model market populated by individuals using a range of trading rules we show that the presence of technical traders may be beneficial, in some cases reducing volatility and increasing price efficiency. In particular, contrarian traders who base their decisions on high frequency data have the largest positive effect. It is also found that if technical traders condition their actions using ‘real time’ information, they partially emulate arbitrageurs and make positive profits.

Market Ecologies: The Interaction and Profitability of Technical Trading Strategies

Technical trading strategies make profits by identifying and exploiting patterns in market prices — patterns generated by the interaction of market participants. This paper examines model markets composed of traders using a range of trading rules, and identifies the ecologies under which different strategies are profitable and persist. We show that the presence of technical traders may be beneficial, in some cases reducing volatility and increasing price efficiency. In particular, contrarian traders who base their decisions on high frequency data have the largest positive effect. It is also found that if technical traders condition their actions using ‘real time’ information, they partially emulate arbitrageurs and make positive profits. If this is not the case, trend following traders may make higher returns.

The Adaptive Market Hypothesis: A Neural Network Approach

The efficiency of financial markets has been questioned, supposedly answered, challenged and re-questioned by academics since its inception by Fama (1965b). A new paradigm of thought emerged in Lo (2004, 2005) who introduced an alternative to the Efficient Market Hypothesis (EMH). This Adaptive Market Hypothesis (AMH) would describe efficiency as the interaction of market participants. Hence, efficiency would be cyclical, limited by the nature of said participants and the environment this interaction occurs within. This thesis aims to revisit the AMH by providing a practical means of testing its implications via neural networks – with the intent of forming definitions of the degrees of adaptivity (similar to the three forms of efficiency under the EMH). When measuring the performance of the neural network, the number of hidden nodes will be plotted against the error term. Literature shows that the optimum network lies at the point of intersection between the training and testing phases. Using a base sample period as the initial training phase, it is hypothesised that the optimal neural network will perform well up to some point in time. Afterwards, due to say an exogenous influence, the network’s performance will decrease unless retrained with data that incorporates the exogenous influence. As this process is repeated, a series of “optimum network points” will emerge. It is hypothesised that this series fluctuates over time, in line with major exogenous events (such as the internet bubble of 2000 or the global recession of 2007). A plot of these points over time should depict that efficiency (or rather performance of the neural network) is indeed cyclical.

An Austrian Economics View of the Market Process: The Impact of Entrepreneurial Actions on Sensemaking and Market Discourse

The Austrian school of economics has long studied the interaction of market participants - focusing particularly on entrepreneurs - and their impact on the market process. Central to this process, however, is the oft-overlooked phenomenon of market discourse, or the objective and subjective information exchanged in the marketplace that helps market participants make sense of firms' entrepreneurial actions. In this paper, I examine how entrepreneurial actions drive the market process and explore market discourse as a powerful mechanism in the sensemaking process of market participants by which these new actions get accepted or rejected by the market.

A Case Study of Rice Marketing in Selected Areas of Myanmar

This paper evaluates the rice marketing channels and the interaction of market participants in selected areas of Myanmar. The main rice marketing channels in the studied sites indicate that almost all products of farmers flow to collectors and millers. Lack of formal cooperative structures, farmers support groups and growing market power of millers at the farm-gate level result that farmers possess low bargaining power in the trading of paddy and rice at the studied areas. Moreover news about price changes and relevant price-making forces in pertinent terminal market are generally obtained from informal sources. This indicates that the informal market information is dominant and plays an important role. Goverument should build-up the cooperatives not only to encourage the bargaining power of farTners at famn gate level, but also to accelerate the market intelligence of intermediaries in the rice marketing channel. Moreover, to solve the conflicting sources of information, a public market information center organized by governrnent and non-profit rice trader's organization is needed to distribute reliable up-to-date market information effectively and efficiently.

Initial Offerings of Options

This paper considers the introduction of stock options in an (dynamically) incomplete securities market made up of a riskless bond and the stock. The stock price follows a geometric Brownian motion with constant drift. However, there is incomplete information about the unknown stochastic volatility. The option price is determined by a uniform-price auction. Thus an option pricing formula results from the interaction of market participants relying on private information on the unknown stochastic volatility under an explicit market structure. This paper incorporates market microstructure considerations into an extended Black-Scholes model with incomplete information on the underlying volatility. It relies on the growing importance of auctionlike trading rules in financial markets.