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The impact of an autonomous AI trader on outcomes in experimental asset markets

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Listed:
  • Ackert, Lucy F.
  • Mohamadean, Ahmed
  • Shehata, Mohamed
  • Veenstra, Kevin

Abstract

The robustness of mispricing in experimental markets with finite-life assets is well documented (Smith, Suchanek, and Williams (SSW) (1988) and succeeding work). We report results of SSW markets in which an autonomous artificial intelligence (AI) trader interacts with humans in two risk conditions. Notably, our AI trader uses machine learning neural networks to act autonomously and is not programmed using an algorithm. The presence of the AI trader does not significantly alter the level of mispricing as compared with all human traders in either risk condition. However, the wealth of human traders declines significantly in the presence of an AI trader. The AI trader executes strategically and is consistently the top performer. These findings remain unchanged when we double the market power of the AI trader. With no gain in pricing efficiency or increase in the welfare of human traders, we find no evidence that an autonomous AI trader promotes the health of capital markets.

Suggested Citation

  • Ackert, Lucy F. & Mohamadean, Ahmed & Shehata, Mohamed & Veenstra, Kevin, 2026. "The impact of an autonomous AI trader on outcomes in experimental asset markets," Journal of Economic Behavior & Organization, Elsevier, vol. 245(C).
    • Handle: RePEc:eee:jeborg:v:245:y:2026:i:c:s0167268126001083
    DOI: 10.1016/j.jebo.2026.107522
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    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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