Algorithmic trading, what if it is just an illusion? Evidence from experimental asset markets

• Published in: Journal of behavioral and experimental economics Vol. 112; p. 102240
• Main Authors: Jacob-Leal, Sandrine, Hanaki, Nobuyuki
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.10.2024
• Subjects: Algorithmic trading; Asset market; Experiment; Market efficiency; Market volatility; Algorithmic trading; D84; Market volatility; G41; Experiment; G12; Market efficiency; G14; C92; Asset market

We experimentally investigate whether and how the potential presence of algorithmic trading (AT) in human-only asset markets can influence humans’ price forecasts, trading activities and price dynamics. Two trading strategies commonly employed by high-frequency traders, spoofing (SP) - associated wi...