Computational Model Library

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We introduce a model of prediction markets that uses opinion dynamics as its underlying mechanism for price formation. We base the opinion dynamics on the Deffuant model of bounded rationality. We have used this model to show that price formation in prediction markets can be robustly explained by opinion dynamics, and that the model can also explain phase transitions depending on just two parameters.

This code can be used to analyze the sensitivity of the Deffuant model to different measurement errors. Specifically to:
- Intrinsic stochastic error
- Binning of the measurement scale
- Random measurement noise
- Psychometric distortions

Studies on the fundamental role of diverse media in the evolution of public opinion can protect us from the spreading brainwashing, extremism, and terrorism. Many fear the information cocoon may result in polarization of the public opinion. The model of opinion dynamics that considers different influences and horizons for every individual, and the simulations are based on a real-world social network.

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