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to overreacting to market events, for example by producing unanticipated interaction effects that exacerbate volatility …
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This Article argues that the rise of algorithmic trading undermines efficient capital allocation in securities markets. It is a bedrock assumption in theory that securities prices reveal how effectively public companies utilize capital. This conventional wisdom rests on the straightforward...
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fully control the operation of the algorithm. Algorithms can execute many thousands of trades in milliseconds, crunching … for a trader to fully predict how an algorithm might behave ex ante and near-impossible for her to track and control its …
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