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Shared Models, Selective Trading, and Order Flow

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  • Victoria Ruojie Li
  • Arka Prava Bandyopadhyay

Abstract

We study whether model diversity survives selection into trading. In synthetic markets with a fixed mixture of three language-model families, news presentation changes their representation among submitted orders. At the announcement round, Qwen's share of submitted orders shifts by 48 percentage points in the financing event, with little change in net order counts. In the workforce-reduction event, Mistral's share shifts by 40 percentage points while net counts reverse sign. Homogeneous populations remove opposing flow when their active decisions share a direction. An analytical decomposition shows why selection can improve or worsen price accuracy even at unchanged aggregate demand sensitivity. The evidence concerns presentation bundles and submitted flow; cleaner replication and a known-value validation are specified prospectively.

Suggested Citation

  • Victoria Ruojie Li & Arka Prava Bandyopadhyay, 2026. "Shared Models, Selective Trading, and Order Flow," Papers 2610.01897, arXiv.org.
    • Handle: RePEc:arx:papers:2610.01897
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    References listed on IDEAS

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    1. Cheng, Qiang & Lin, Pengkai & Zhao, Yue, 2025. "Does generative AI facilitate investor Trading? Early evidence from ChatGPT outages," Journal of Accounting and Economics, Elsevier, vol. 80(2).
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    3. Lopez-Lira, Alejandro & Tang, Yuehua, 2026. "Can ChatGPT forecast stock price movements? Return predictability and large language models," Journal of Financial Economics, Elsevier, vol. 184(C).
    4. Terrence Hendershott & Charles M. Jones & Albert J. Menkveld, 2011. "Does Algorithmic Trading Improve Liquidity?," Journal of Finance, American Finance Association, vol. 66(1), pages 1-33, February.
    5. Itay Goldstein & Liyan Yang, 2015. "Information Diversity and Complementarities in Trading and Information Acquisition," Journal of Finance, American Finance Association, vol. 70(4), pages 1723-1765, August.
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    Cited by:

    1. Victoria Ruojie Li, 2026. "Requested, Executed and Recoverable Credit: Shared Action Ordering among LLM Borrowers in a Simulated Lending Market," Papers 2610.15973, arXiv.org, revised Oct 2026.

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