Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.650813
Title: Application of agent based modeling to insurance cycles
Author: Zhou, Feng
Awarding Body: City University London
Current Institution: City, University of London
Date of Award: 2013
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Abstract:
Traditional models of analyzing the general insurance market often focus on the behavior of a single insurer in a competitive market. They assume that the major players in this market are homogeneous and have a common goal to achieve a same long-term business objective, such as solving profit (or utility) maximization. Therefore these individual players in the traditional models can be implemented as a single representative economic agent with full rationality to solve the utility optimization. To investigate insurance pricing (or underwriting) cycles, the existing literature attempts to model various isolated aspects of the market, keeping other factors exogenous. We and that a multi-agent system describing an insurance market affords a helpful understanding of the dynamic interactions of individual agents that is a complementary to the traditional models. Such agent-based models (ABM) try to capture the complexity of the real world. Thus, economic agents are heterogeneous and follow divergent behavioral rules depending on their current unique competitive situations or comparative advantages relating to, for example, their existing market shares, distribution channels, information processes and product differentiations. The real-world continually-evolving environment leads agents to follow common rules of thumb to implement their business strategies, rather than completely be utility-maximizer with perfect foresight in an idealized world. The agents are adaptively learning from their local competition over time. In fact, the insurance cycles are the results of these dynamic interactions of agents in such complex system.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.650813  DOI: Not available
Keywords: HB Economic Theory
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