Robot traders can prevent extreme events in complex stock markets

Nicolas Suhadolnik; Jaqueson Galimberti; Sergio Da Silva

doi:10.1016/j.physa.2010.07.025

Robot traders can prevent extreme events in complex stock markets

Nicolas Suhadolnik, Jaqueson Galimberti, Sergio Da Silva

The University of Manchester

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Abstract

If 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. © 2010 Elsevier B.V. All rights reserved.

Original language	English
Pages (from-to)	5182-5192
Number of pages	10
Journal	Physica A: Statistical Mechanics and its Applications
Volume	389
Issue number	22
DOIs	https://doi.org/10.1016/j.physa.2010.07.025
Publication status	Published - 15 Dec 2010

Keywords

Econophysics
Financial regulation
Robot traders
Stock markets

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.physa.2010.07.025

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abstract = "If 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. {\textcopyright} 2010 Elsevier B.V. All rights reserved.",

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Robot traders can prevent extreme events in complex stock markets

Abstract

Keywords

UN SDGs

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