Software agents and market (In) efficiency: A human trader experiment

Jens Grossklags, Carsten Schmidt

Research output: Contribution to journalArticlepeer-review

39 Scopus citations


This paper studies how software agents influence the market behavior of human traders. Software agents with a passive arbitrage-seeking strategy are introduced in a double auction market experiment with human subjects in the laboratory. As a treatment variable, the influence of information on the existence of software agents is investigated. We found that common knowledge about the presence of software agents triggers more efficient market prices when the programmed strategy was employed, whereas an effect of the information condition on behavioral variables could not be observed. When controlling for information on software agents' participation, the introduction of software agents results in lower market efficiency.

Original languageEnglish (US)
Pages (from-to)56-67
Number of pages12
JournalIEEE Transactions on Systems, Man and Cybernetics Part C: Applications and Reviews
Issue number1
StatePublished - Jan 2006

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering
  • Software
  • Information Systems
  • Human-Computer Interaction
  • Computer Science Applications
  • Electrical and Electronic Engineering


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