  A class of heterogeneous agent models is investigated where investors switch
trading position whenever their motivation to do so exceeds some critical
threshold. These motivations can be psychological in nature or reflect
behaviour suggested by the efficient market hypothesis (EMH). By introducing
different propensities into a baseline model that displays EMH behaviour, one
can attempt to isolate their effects upon the market dynamics.
  The simulation results indicate that the introduction of a herding propensity
results in excess kurtosis and power-law decay consistent with those observed
in actual return distributions, but not in significant long-term volatility
correlations. Possible alternatives for introducing such long-term volatility
correlations are then identified and discussed.
