Predatory trading and risk minimisation: how to (b)eat the competition


الملخص بالإنكليزية

We present a model of predatory traders interacting with each other in the presence of a central reserve (which dissipates their wealth through say, taxation), as well as inflation. This model is examined on a network for the purposes of correlating complexity of interactions with systemic risk. We suggest the use of selective networking to enhance the survival rates of arbitrarily chosen traders. Our conclusions show that networking with doomed traders is the most risk-free scenario, and that if a trader is to network with peers, it is far better to do so with those who have less intrinsic wealth than himself to ensure individual, and perhaps systemic stability.

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