Economics, Econometrics and Finance
8 years ago

New study reveals how traders manipulate prices for profit gains

RePEc: Research Papers in Economics
Price Manipulation, Dynamic Informed Trading and Tame Equilibria: Theory and Computation
Shino Takayama

Paper Summary

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The article explores how traders can manipulate prices in financial markets. It identifies conditions for a unique equilibrium and introduces the concept of a "tame" equilibrium. The researchers find a bound for the number of trading rounds where a unique equilibrium exists. They also determine when price manipulation occurs and suggest this analysis can be extended to continuous-time settings.