Does an Artificial Intelligence Perform Market Manipulation With Its Own Discretion? – A Genetic Algorithm Learns in an Artificial Market Simulation -

IEEE Symposium Series on Computational Intelligence, Computational Intelligence for Financial Engineering and Economics (CIFEr)

6 Pages Posted: 16 Jun 2020 Last revised: 7 Jan 2021

See all articles by Takanobu Mizuta

Takanobu Mizuta

SPARX Asset Management Co., Ltd.

Date Written: May 21, 2020

Abstract

Who should be charged with responsibility for an artificial intelligence performing market manipulation have been discussed. In this study, I constructed an artificial intelligence using a genetic algorithm that learns in an artificial market simulation, and investigated whether the artificial intelligence discovers market manipulation through learning with an artificial market simulation despite a builder of artificial intelligence has no intention of market manipulation. As a result, the artificial intelligence discovered market manipulation as an optimal investment strategy. This result suggests necessity of regulation, such as obligating builders of artificial intelligence to prevent artificial intelligence from performing market manipulation.

Keywords: AI Trader, Illegal Trades, Responsibility, Agent-Based Model, Multi-Agent Simulation, Artificial Market

JEL Classification: G1, G18

Suggested Citation

Mizuta, Takanobu, Does an Artificial Intelligence Perform Market Manipulation With Its Own Discretion? – A Genetic Algorithm Learns in an Artificial Market Simulation - (May 21, 2020). IEEE Symposium Series on Computational Intelligence, Computational Intelligence for Financial Engineering and Economics (CIFEr), Available at SSRN: https://ssrn.com/abstract=3606962 or http://dx.doi.org/10.2139/ssrn.3606962

Takanobu Mizuta (Contact Author)

SPARX Asset Management Co., Ltd. ( email )

Tokyo
Japan

HOME PAGE: http://mizutatakanobu.com

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