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Researchers Warn AI Could Rig Markets Without Being Told
- Written by Kiara Fabbri Former Tech News Writer
- Fact-Checked by Sarah Frazier Former Content Manager
A new study reveals that even basic AI bots can learn to collude in trading simulations, forming price-fixing cartels without human guidance.
In a rush? Here are the quick facts:
- AI bots colluded in trading simulations without being programmed to do so.
- Collusion emerged in both noisy and clear market conditions.
- Limiting AI complexity may unintentionally increase collusive behavior.
Artificial intelligence bots demonstrate market-rigging abilities, even when they lack intelligence or malicious intent.
A new study by researchers from the Wharton School and the Hong Kong University of Science & Technology has shown that even “dumb” AI bots can learn to collude without any human instructions, posing serious concerns for regulators.
“You can get these fairly simple-minded AI algorithms to collude” without being prompted, said Itay Goldstein, Wharton finance professor and co-author of the study, as reported by Bloomberg . “It looks very pervasive, either when the market is very noisy or when the market is not noisy,” he added.
The researchers built simulated trading markets, containing retail investors and mutual funds, they then allowed reinforcement learning bots to execute trades.
The bots showed an unexpected tendency to cooperate, which resulted in price fixing and profit optimization, despite lacking built-in collusive behavior in their design.
In both noisy and clear market conditions, they eventually chose to “settle,” stopping the search for better strategies. The researchers called this “artificial stupidity,” as reported by Bloomberg.
“For humans, it’s hard to coordinate on being dumb because we have egos,” said co-author Winston Dou, reports Bloomberg. “But machines are like ‘as long as the figures are profitable, we can choose to coordinate on being dumb,’” the researcher added.
The bots scored above 0.5 on a “collusion capacity” scale, where 1 indicates a perfect cartel. The findings don’t prove this behavior is happening in real markets, but they serve as a warning.
“They worry that it’s not their intention,” said Dou of asset managers, as reported by Bloomberg. “But regulators can come to them and say: ‘You’re doing something wrong,’” Dou added.
The study urges regulators to focus on behavioral outcomes rather than intent or communication. Ironically, limiting AI complexity might worsen collusion by locking bots into simplistic, profitable routines.
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New Wearable Tech Uses AI to Improve Concentration
- Written by Kiara Fabbri Former Tech News Writer
- Fact-Checked by Sarah Frazier Former Content Manager
A new AI-powered brain stimulation system helps people improve concentration from home, adapting to individual traits without requiring expensive clinical equipment.
In a rush? Here are the quick facts:
- AI-powered device boosts attention using gentle electrical stimulation at home.
- System adapts intensity based on head size and baseline focus.
- Users with low initial focus showed greatest improvement.
A team of researchers from the University of Surrey and the University of Oxford has collaborated with Cognitive Neurotechnology to create a brain stimulation system powered by AI that effectively boosts attention from the comfort of one’s home.
This innovative system merges AI with an invasive technique known as transcranial random noise stimulation (tRNS), providing a customized approach to enhancing cognitive focus without needing expensive medical equipment like MRI scans.
The AI system adapts to each user by adjusting stimulation intensity based on traits like head size and baseline attention.
“Our modern world constantly competes for our attention. What is exciting about this work is that we have shown it is possible to safely and effectively enhance cognitive performance using a personalised system that people can use independently at home,” said Professor Roi Cohen Kadosh, Head of Psychology at the University of Surrey and lead author of the study, in an interview with Neuroscience News .
“This opens new possibilities for improving sustained attention, learning, and other cognitive abilities in a way that is accessible, adaptive, and scalable.”
Published in npj Digital Medicin e, the study used CE-marked wearable headgear and a tablet-based task in 290 home-based sessions with 103 participants. A follow-up double-blind study with 37 new participants showed that those receiving personalised stimulation performed significantly better, especially those with low initial attention.
The AI also avoided over-stimulation, which can impair performance, and no serious side effects were reported.
Researchers explained that sustained attention is crucial for activities such as driving or studying. They explain in their paper that it is associated with conditions like ADHD and depression. The conventional techniques of brain stimulation often fall short due to their nature.
However, this new approach, utilizing an AI algorithm that evolves with time, offers hope for cognitive improvement in real-life scenarios.
