Effects of Tobin taxes in minority game markets

Ginestra Bianconi, Tobias Galla, Matteo Marsili, Paolo Pin

    Research output: Contribution to journalArticlepeer-review


    We show that the introduction of Tobin taxes in agent-based models of currency markets can lead to a reduction of both speculative trading and the magnitude of exchange rate fluctuations at intermediate tax rates. In this regime revenues obtained from speculators are maximal for the institutions acting as market makers. We here focus on minority game models of markets, which are accessible by exact techniques from statistical mechanics. Results are supported by computer simulations. Our findings suggest that at finite systems sizes the effect is most pronounced in a critical region around the phase transition of the infinite system, but much weaker if the market is operating far from criticality and does not exhibit anomalous fluctuations. © 2008 Elsevier B.V. All rights reserved.
    Original languageEnglish
    Pages (from-to)231-240
    Number of pages9
    JournalJournal of Economic Behavior and Organization
    Issue number1-2
    Publication statusPublished - May 2009


    • Minority games
    • Tobin tax


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