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Why Not Use Robots to Stabilize Stock Markets?

Author

Listed:
  • Da Silva, Sergio

Abstract

Why not set up some public-service robot traders to counteract the behavior of traders when it snowballs into extreme moves? I show a blueprint of how this can be accomplished taking advantage of the theory of complex systems.

Suggested Citation

  • Da Silva, Sergio, 2014. "Why Not Use Robots to Stabilize Stock Markets?," MPRA Paper 60567, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60567
    as

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    File URL: https://mpra.ub.uni-muenchen.de/60567/1/MPRA_paper_60567.pdf
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    References listed on IDEAS

    as
    1. Reginald D. Smith, 2010. "Is high-frequency trading inducing changes in market microstructure and dynamics?," Papers 1006.5490, arXiv.org, revised Sep 2010.
    2. Mazzeu, Joao & Otuki, Thiago & Da Silva, Sergio, 2011. "The canonical econophysics approach to the flash crash of May 6, 2010," MPRA Paper 29138, University Library of Munich, Germany.
    3. Raul Matsushita & Sergio Da Silva, 2011. "A log-periodic fit for the flash crash of May 6, 2010," Economics Bulletin, AccessEcon, vol. 31(2), pages 1772-1779.
    4. Suhadolnik, Nicolas & Galimberti, Jaqueson & Da Silva, Sergio, 2010. "Robot traders can prevent extreme events in complex stock markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(22), pages 5182-5192.
    5. Malcolm Edey, 2009. "The Global Financial Crisis and Its Effects," Economic Papers, The Economic Society of Australia, vol. 28(3), pages 186-195, September.
    6. J. Doyne Farmer & Duncan Foley, 2009. "The economy needs agent-based modelling," Nature, Nature, vol. 460(7256), pages 685-686, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Robots; Stock Markets; Algorithmic trading; Financial crashes; Flash crash; Mini-flash crashes;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

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