Items where Author is "Schenk-Hoppé, Klaus"

Investors tend to move funds when they are unhappy with their current portfolio managers' performance. We study the effect of the size of this flow of funds in an agent-based model of the financial market. The model combines the discrete choice approach from agent-based modelling, where all capital is mobile, with the evolutionary finance framework where all growth is endogenous. Our results show that a small amount of freely flowing capital can have a huge impact on the market dynamics. In contrast to the standard model, moreover, clients' intensity of choice has a strong effect even when they exhibit only a very mild recency bias.