Robot traders can prevent extreme events in complex stock markets
Nicolas Suhadolnik (),
Jaqueson Galimberti () and
Sergio Da Silva ()
Physica A: Statistical Mechanics and its Applications, 2010, vol. 389, issue 22, 5182-5192
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)
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Working Paper: Robot traders can prevent extreme events in complex stock markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:389:y:2010:i:22:p:5182-5192
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