Financial/Actuarial Mathematics Seminar

January 15, 2009



Hybrid Atlas model of Equity Market

Tomoyuki Ichiba

Department of Statistics, Columbia University

January 15, 2008



Abstract

We discuss an abstract financial equity market where the ranks of market capitals have an important role. Under some reasonable assumptions the market has some stability properties which are observed in the real market. We study this Atlas model and its asymptotic properties with relation to the reflected Brownian motion in a polyhedral domain. In a general n-dimensional diffusion set-up there is an interesting phenomenon called triple collision. We argue some sufficient conditions for no-triple collision under this model. Several portfolio strategies are also discussed.


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