We present results from an experiment where participants have access to a set of robots (automated trading algorithms), which they may deploy, launch, halt and replace at will, while still trading manually.
Participants in an experimental market choose to enter private value trades manually and/or algorithmically. Each algorithm or trading robot makes or takes liquidity based on the trader’s current marginal valuation modulo a spread chosen by the trader. We evaluate experimental outcomes against both competitive equilibrium and equilibrium of the strategic game if all participants choose…