Robot traders can prevent extreme events in complex stock markets
AbstractIf 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 23923.
Date of creation: 2010
Date of revision:
Stock markets; Robot traders; Financial regulation; Econophysics;
Other versions of this item:
- 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.
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- G01 - Financial Economics - - General - - - Financial Crises
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- Da Silva, Sergio, 2013. "Time to abandon group thinking in economics," MPRA Paper 45660, University Library of Munich, Germany.
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