Saturday, May 27, 2017

The sandbox does this with distinction

Algorithmic Pricing and Competition: The Small-Town Gas Station Example

Tim Taylor post abut a sandbox issue, anti-trust.  Can auto-traded cash transactions be designed to conceal inside information?   In a small town it is anti-trust for two of three gas stations to discuss prices without including the third.

The sand box rule is fair access to the tradebook, and that generally means round robin access and the peeking price (cycle pricing) is very small, not assumed zero.  This is the stable, two color auto-pricer.   There is no insider conspiracy that can be unfolded en-mass, the victims get a fair access to the trade stack as it unfolds.  

Out of market conspiracies, the development of inside information is legal, expected and pure cash has the job of getting insiders to trade their ideas ASAP. And this is all smart contract layer, and all of your anti-trust will happen here. The marketing folks in sandbox defined a new term for smart layer algorithms, regtech.  The term recognizes this distinction between auto-traded cash and smart contracts.  They are both algorithmic, but pure cash does not  know time or space; just odds of occurrence. 

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