AN IN-DEPTH LITERATURE REVIEW OF EVOLUTIONARY FINANCE METHODOLOGIES

Аннотация

INTRODUCTION dynamic systems characterized by the The field of finance has undergone significant interaction of diverse agents whose behaviors transformations in recent decades, influenced and strategies evolve over time. This approach by advancements in technology, changes in recognizes the importance of adaptation, market dynamics, and the growing complexity learning, and competition among financial of financial systems. Traditional financial agents, leading to a more nuanced theories, primarily based on equilibrium understanding of market behavior and models and rational agent assumptions, have decision-making processes. By modeling often struggled to explain real-world financial systems as complex adaptive systems, phenomena such as market volatility, researchers can analyze how individual behavioral biases, and systemic risks. In behaviors aggregate to produce emergent response to these limitations, evolutionary market phenomena. finance has emerged as a promising paradigm that offers a fresh perspective on financial Despite the increasing interest in evolutionary markets by incorporating concepts from finance, the methodologies employed in this evolutionary biology, behavioral science, and domain remain diverse and fragmented. From complexity theory. agent-based modeling and evolutionary game theory to adaptive market hypothesis Evolutionary finance posits that financial frameworks, various approaches have been markets are not static entities but rather https://www.theamericanjournals.com/index.php/tajmei 1 THE USA JOURNALS THE AMERICAN JOURNAL OF MANAGEMENT AND ECONOMICS INNOVATIONS (ISSN- 2693-0811) VOLUME 06 ISSUE11 developed to capture the intricacies of financial categorization, data extraction, and synthesis of dynamics. However, a comprehensive survey of findings. these methodologies and their respective Literature Identification contributions to the field is lacking. The first step in the methodology was to identify This literature review aims to fill this gap by relevant literature pertaining to evolutionary providing an in-depth analysis of the various finance methodologies. A systematic search was evolutionary finance methodologies. It will conducted using multiple academic databases, categorize existing research into key themes, including Google Scholar, JSTOR, ScienceDirect, explore the theoretical underpinnings of each and Web of Science. The search utilized a approach, and assess their applications in combination of keywords such as "evolutionary understanding critical financial phenomena finance," "agent-based modeling," "evolutionary such as asset pricing, market efficiency, and risk game theory," "adaptive markets," and management. Furthermore, this review will "behavioral finance" to capture a wide range of identify gaps in the current literature and articles, conference papers, and book chapters suggest potential avenues for future research. related to the topic. The search was limited to By synthesizing findings from a wide range of publications from the last two decades to studies, this review seeks to enhance the ensure the inclusion of recent advancements understanding of evolutionary finance and contemporary research trends. methodologies and their relevance in Selection Criteria Establishment contemporary financial research. Ultimately, it aims to contribute to the ongoing discourse on Following the initial search, selection criteria how evolutionary concepts can enrich the study were established to filter the identified of finance, providing valuable insights for both literature for relevance and quality. Studies academics and practitioners in the field. were included if they focused explicitly on methodologies within evolutionary finance,