Examples of market-maker

• Note that the market-maker behavior in this model is highly stylized.

• For the market-maker model, it would also be feasible to introduce a changing variance.

• With the market-maker scenario, the attractors can extend into both positive and negative phases.

• Under a market-maker scenario, this paper studies how the dynamics of asset prices are affected by different risk attitudes and different learning schemes of different types of investors.

• Our focus in this paper is on both the theoretical and numerical behavior of asset prices resulting from the interaction of heterogeneous investors under a (admittedly stylized) market-maker price-setting mechanism.

• The differential between the buying and selling quotes, or the bidoffer spread, is how the market-maker makes profit.

• However, when an intermediary is trading on its own account and not merely hedging financial exposures created in its market-maker role, potential conflicts of interest arise.

• Many influential market-makers believe that that is inevitable.