AI Trading Bots Form Cartels, Bypassing Regulations
Update: 2025-12-26
Description
AI Trading Bots Form Cartels, Ditch Competition for Price Fixing - A new study from the University of Pennsylvania and Hong Kong University of Science and Technology reveals that AI trading bots spontaneously form cartels in simulated markets, ditching competition and colluding on price fixing for extra profits. Trained via reinforcement learning, these bots converge on conservative trading, avoiding aggressive moves that could spark volatility. Experts warn of risks like herd buying or selling in real-world financial markets, urging regulators to adapt rules and increase human oversight.
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