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Why Not Use Robots to Stabilize Stock Markets?

Author

Listed:
  • Da Silva, Sergio

Abstract

Why not set up some public-service robot traders to counteract the behavior of traders when it snowballs into extreme moves? I show a blueprint of how this can be accomplished taking advantage of the theory of complex systems.

Suggested Citation

  • Da Silva, Sergio, 2014. "Why Not Use Robots to Stabilize Stock Markets?," MPRA Paper 60567, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60567
    as

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    File URL: https://mpra.ub.uni-muenchen.de/60567/1/MPRA_paper_60567.pdf
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    References listed on IDEAS

    as
    1. Reginald D. Smith, 2010. "Is high-frequency trading inducing changes in market microstructure and dynamics?," Papers 1006.5490, arXiv.org, revised Sep 2010.
    2. Malcolm Edey, 2009. "The Global Financial Crisis and Its Effects," Economic Papers, The Economic Society of Australia, vol. 28(3), pages 186-195, September.
    3. J. Doyne Farmer & Duncan Foley, 2009. "The economy needs agent-based modelling," Nature, Nature, vol. 460(7256), pages 685-686, August.
    4. Mazzeu, Joao & Otuki, Thiago & Da Silva, Sergio, 2011. "The canonical econophysics approach to the flash crash of May 6, 2010," MPRA Paper 29138, University Library of Munich, Germany.
    5. Raul Matsushita & Sergio Da Silva, 2011. "A log-periodic fit for the flash crash of May 6, 2010," Economics Bulletin, AccessEcon, vol. 31(2), pages 1772-1779.
    6. Suhadolnik, Nicolas & Galimberti, Jaqueson & Da Silva, Sergio, 2010. "Robot traders can prevent extreme events in complex stock markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(22), pages 5182-5192.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Robots; Stock Markets; Algorithmic trading; Financial crashes; Flash crash; Mini-flash crashes;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

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