TwinMarket: A Scalable Behavioral and Social Simulation for Financial
  Markets
Authors: name: Yuzhe Yang; name: Yifei Zhang; name: Minghao Wu; name: Kaidi Zhang; name: Yunmiao Zhang; name: Honghai Yu; name: Yan Hu; name: Benyou Wang
Published: 2025-02-03 16:39:48

Abstract: The study of social emergence has long been a central focus in social
science. Traditional modeling approaches, such as rule-based Agent-Based Models
(ABMs), struggle to capture the diversity and complexity of human behavior,
particularly the irrational factors emphasized in behavioral economics.
Recently, large language model (LLM) agents have gained traction as simulation
tools for modeling human behavior in social science and role-playing
applications. Studies suggest that LLMs can account for cognitive biases,
emotional fluctuations, and other non-rational influences, enabling more
realistic simulations of socio-economic dynamics. In this work, we introduce
TwinMarket, a novel multi-agent framework that leverages LLMs to simulate
socio-economic systems. Specifically, we examine how individual behaviors,
through interactions and feedback mechanisms, give rise to collective dynamics
and emergent phenomena. Through experiments in a simulated stock market
environment, we demonstrate how individual actions can trigger group behaviors,
leading to emergent outcomes such as financial bubbles and recessions. Our
approach provides valuable insights into the complex interplay between
individual decision-making and collective socio-economic patterns.