Robot traders can prevent extreme events in complex stock markets

Nicolas Suhadolnik, Jaqueson Galimberti and Sergio Da Silva

MPRA Paper from University Library of Munich, Germany

Abstract: If stock markets are complex, monetary policy and even financial regulation may be useless to prevent bubbles and crashes. Here, we suggest the use of robot traders as an anti-bubble decoy. To make our case, we put forward a new stochastic cellular automata model that generates an emergent stock price dynamics as a result of the interaction between traders. After introducing socially integrated robot traders, the stock price dynamics can be controlled, so as to make the market more Gaussian.

Keywords: Stock markets; Robot traders; Financial regulation; Econophysics (search for similar items in EconPapers)
JEL-codes: G01 G18 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-rmg
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Robot traders can prevent extreme events in complex stock markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23923

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