Related papers: Computational Arbitrage in AI Model Markets
Decentralized exchanges using automated market makers create arbitrage opportunities with centralized exchanges, where gas fees and transaction ordering are critical. Existing models largely overlook competition among arbitrageurs, despite…
In a discrete-time setting, we study arbitrage concepts in the presence of convex trading constraints. We show that solvability of portfolio optimization problems is equivalent to absence of arbitrage of the first kind, a condition weaker…
Prediction markets are used in real life to predict outcomes of interest such as presidential elections. This paper presents a mathematical theory of artificial prediction markets for supervised learning of conditional probability…
While high-stakes ML applications demand strict regulations, strategic ML providers often evade them to lower development costs. To address this challenge, we cast AI regulation as a mechanism design problem under uncertainty and introduce…
In the ever evolving landscape of decentralized finance automated market makers (AMMs) play a key role: they provide a market place for trading assets in a decentralized manner. For so-called bluechip pairs, arbitrage activity provides a…
We present an approach, based on deep neural networks, that allows identifying robust statistical arbitrage strategies in financial markets. Robust statistical arbitrage strategies refer to trading strategies that enable profitable trading…
We generalize the Arbitrage Pricing Theory (APT) to include the contribution of virtual arbitrage opportunities. We model the arbitrage return by a stochastic process. The latter is incorporated in the APT framework to calculate the…
Despite data's central role in AI production, it remains the least understood input. As AI labs exhaust public data and turn to proprietary sources, with deals reaching hundreds of millions of dollars, research across computer science,…
In the ever evolving landscape of decentralized finance automated market makers (AMMs) play a key role: they provide a market place for trading assets in a decentralized manner. For so-called bluechip pairs, arbitrage activity provides a…
We envision a marketplace where diverse entities offer specialized "modules" through APIs, allowing users to compose the outputs of these modules for complex tasks within a given budget. This paper studies the market design problem in such…
Recent advances in Machine Learning (ML) and Artificial Intelligence (AI) follow a familiar structure: A firm releases a large, pretrained model. It is designed to be adapted and tweaked by other entities to perform particular,…
Training advanced AI models requires large investments in computational resources, or compute. Yet, as hardware innovation reduces the price of compute and algorithmic advances make its use more efficient, the cost of training an AI model…
Auctions are modeled as Bayesian games with continuous type and action spaces. Determining equilibria in auction games is computationally hard in general and no exact solution theory is known. We introduce an algorithmic framework in which…
Algorithms increasingly automate bidding in online auctions, raising concerns about tacit bid suppression and revenue shortfalls. Prior work identifies individual mechanisms behind algorithmic bid suppression, but it remains unclear which…
We consider a popular model of microeconomics with countably many assets: the Arbitrage Pricing Model. We study the problem of optimal investment under an expected utility criterion and look for conditions ensuring the existence of optimal…
Machine learning models play a key role for service providers looking to gain market share in consumer markets. However, traditional learning approaches do not take into account the existence of additional providers, who compete with each…
Recent advances in generative AI systems have dramatically reduced the cost of digital production, fueling narratives that widespread participation in software creation will yield a proliferation of viable companies. This paper challenges…
Statistical arbitrage is a class of financial trading strategies using mean reversion models. The corresponding techniques rely on a number of assumptions which may not hold for general non-stationary stochastic processes. This paper…
This paper explores the capacity of artificial intelligence (AI) algorithms to autonomously design incentive-compatible contracts in dual-principal-agent settings, a relatively unexplored aspect of algorithmic mechanism design. We develop a…
Over the past decade, crowdsourcing has emerged as a cheap and efficient method of obtaining solutions to simple tasks that are difficult for computers to solve but possible for humans. The popularity and promise of crowdsourcing markets…