Abstract
A large portion of financial theory and modeling neglects the presence of imperfections in financial markets. This is something that one would expect since the inclusion of market imperfections significantly increases the complexity of any model, and qualitatively alters the problem under consideration. The sources for such imperfections are directly connected with the nature of financial trading, and they appear as transaction costs, taxes, and/or price policy interventions. The presence of practically any friction in the market can dramatically change the type of financial modeling that is needed. Nevertheless, practice suggests that imperfections are a source of concern for all participants in the market, and, consequently, realistic models that can incorporate them are needed.
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© 1997 Springer-Verlag Berlin Heidelberg
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Nagurney, A., Siokos, S. (1997). Dynamic Imperfect Market Models. In: Financial Networks. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-59066-5_10
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DOI: https://doi.org/10.1007/978-3-642-59066-5_10
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-63835-0
Online ISBN: 978-3-642-59066-5
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