Computational Finance

Computational finance involves using computer-based mathematical models to analyze financial markets and investment strategies. In the context of experimental finance, it focuses on simulating market conditions to study how individuals and institutions make financial decisions. Researchers can create virtual environments to test theories, observe behaviors, and assess the effects of different strategies without the risks of real-world trading. This helps improve our understanding of market dynamics and decision-making processes, ultimately leading to better financial tools and strategies for investors.