We develop further ideas on how to construct low-dimensional models of stochastic dynamical systems. The aim is to derive a consistent and accurate model from the originally high-dimensional system. This is done with the support of centre manifold theory and techniques. Aspects of several...

This paper studies the switching of trading strategies and its effect on the market volatility in a continuous double auction market. We describe the behavior when some uninformed agents, who we call switchers, decide whether or not to pay for information before they trade. By paying for the...