Analyzing the Pareto principle based on the artificial stock market

In the decade, the use of agent-based artificial stock market (ASM) which is a bottom-up method for financial complex systems for study various questions of real stock market have been acceptance by more and more social scientists. Firstly, this paper reports the construction of artificial stock market based on the Arthur's artificial stock market. It emerges the similar facts with real data in Chinese stock market, including volatility clustering, the excess kurtosis of the distribution of return, especially fractal structure. From this point, the artificial stock market can not only generate stock price trends and properties rather similar to the real stock market, but also show the fractal structure in deep consistency with the real stock market. Then, this paper applies the artificial stock market in an empirical case--the Pareto principle in the all world stock market, which means that that twenty percent of the people owned eighty percent of the wealth in the stock market. This paper makes use of ASM reappear the 80-20 phenomenon of the wealth in the real stock market, and reveal the producing reason of Pareto rule of the stock market. So, research on the artificial stock market can reveal evolution rule of real stock market, operate mechanism, policy influence and better investment strategy.