IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/23923.html
   My bibliography  Save this paper

Robot traders can prevent extreme events in complex stock markets

Author

Listed:
  • Suhadolnik, Nicolas
  • Galimberti, Jaqueson
  • Da Silva, Sergio

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.

Suggested Citation

  • Suhadolnik, Nicolas & Galimberti, Jaqueson & Da Silva, Sergio, 2010. "Robot traders can prevent extreme events in complex stock markets," MPRA Paper 23923, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:23923
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/23923/1/MPRA_paper_23923.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaqueson K. Galimberti & Nicolas Suhadolnik & Sergio Silva, 2017. "Cowboying Stock Market Herds with Robot Traders," Computational Economics, Springer;Society for Computational Economics, vol. 50(3), pages 393-423, October.
    2. Da Silva, Sergio, 2014. "Why Not Use Robots to Stabilize Stock Markets?," MPRA Paper 60567, University Library of Munich, Germany.
    3. Da Silva, Sergio, 2013. "Time to abandon group thinking in economics," MPRA Paper 45660, University Library of Munich, Germany.

    More about this item

    Keywords

    Stock markets; Robot traders; Financial regulation; Econophysics;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G01 - Financial Economics - - General - - - Financial Crises

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:23923. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.