Bitcoin Price Manipulation Regulation from a Game Perspective
Frequent price manipulation in the Bitcoin market will lead to market risk and seriously disrupt the financial order, but there is less research on its regulation. We address the Bitcoin price manipulation problem by building a regulatory game model. First, we study the price manipulation mechanism...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Tsinghua University Press
2023-12-01
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| Series: | Journal of Social Computing |
| Subjects: | |
| Online Access: | https://www.sciopen.com/article/10.23919/JSC.2023.0027 |
| _version_ | 1797293739580850176 |
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| author | Yingxin Gao Yanmei Zhang Zheng Lin Aihua Jiang |
| author_facet | Yingxin Gao Yanmei Zhang Zheng Lin Aihua Jiang |
| author_sort | Yingxin Gao |
| collection | DOAJ |
| description | Frequent price manipulation in the Bitcoin market will lead to market risk and seriously disrupt the financial order, but there is less research on its regulation. We address the Bitcoin price manipulation problem by building a regulatory game model. First, we study the price manipulation mechanism of the Bitcoin market based on behavioral finance and clarify the boundary conditions. Second, we introduce regulator constraints and establish a game model between the manipulator and the regulator. Further, through variable deconstruction, parameter verification, and simulation analysis, we explore how to achieve effective regulation of Bitcoin price manipulation. We find that the effective regulation of Bitcoin price manipulation can be achieved in three ways: (1) Adjust the penalty coefficient with a certain lower threshold so that the manipulator’s expected return is negative; (2) Set the lowest possible price fluctuation standard while ensuring that it does not interfere with market-based transactions; (3) The simulation of price manipulation regulation is optimized and most efficiently controlled when the probability of investigation is dynamically adjusted by a concave function on the price fluctuation standard. |
| first_indexed | 2024-03-07T21:18:47Z |
| format | Article |
| id | doaj.art-5a9cb6f6e34e4ed293c8620e03f195e2 |
| institution | Directory Open Access Journal |
| issn | 2688-5255 |
| language | English |
| last_indexed | 2024-03-07T21:18:47Z |
| publishDate | 2023-12-01 |
| publisher | Tsinghua University Press |
| record_format | Article |
| series | Journal of Social Computing |
| spelling | doaj.art-5a9cb6f6e34e4ed293c8620e03f195e22024-02-27T15:03:29ZengTsinghua University PressJournal of Social Computing2688-52552023-12-014438239710.23919/JSC.2023.0027Bitcoin Price Manipulation Regulation from a Game PerspectiveYingxin Gao0Yanmei Zhang1Zheng Lin2Aihua Jiang3School of Information, Central University of Finance and Economics, Beijing 100081, ChinaSchool of Information, Central University of Finance and Economics, Beijing 100081, ChinaSchool of Information, Central University of Finance and Economics, Beijing 100081, ChinaSchool of Taxation, Central University of Finance and Economics, Beijing 100081, ChinaFrequent price manipulation in the Bitcoin market will lead to market risk and seriously disrupt the financial order, but there is less research on its regulation. We address the Bitcoin price manipulation problem by building a regulatory game model. First, we study the price manipulation mechanism of the Bitcoin market based on behavioral finance and clarify the boundary conditions. Second, we introduce regulator constraints and establish a game model between the manipulator and the regulator. Further, through variable deconstruction, parameter verification, and simulation analysis, we explore how to achieve effective regulation of Bitcoin price manipulation. We find that the effective regulation of Bitcoin price manipulation can be achieved in three ways: (1) Adjust the penalty coefficient with a certain lower threshold so that the manipulator’s expected return is negative; (2) Set the lowest possible price fluctuation standard while ensuring that it does not interfere with market-based transactions; (3) The simulation of price manipulation regulation is optimized and most efficiently controlled when the probability of investigation is dynamically adjusted by a concave function on the price fluctuation standard.https://www.sciopen.com/article/10.23919/JSC.2023.0027bitcoinprice manipulationgame modelbehavioral financefinancial regulation |
| spellingShingle | Yingxin Gao Yanmei Zhang Zheng Lin Aihua Jiang Bitcoin Price Manipulation Regulation from a Game Perspective Journal of Social Computing bitcoin price manipulation game model behavioral finance financial regulation |
| title | Bitcoin Price Manipulation Regulation from a Game Perspective |
| title_full | Bitcoin Price Manipulation Regulation from a Game Perspective |
| title_fullStr | Bitcoin Price Manipulation Regulation from a Game Perspective |
| title_full_unstemmed | Bitcoin Price Manipulation Regulation from a Game Perspective |
| title_short | Bitcoin Price Manipulation Regulation from a Game Perspective |
| title_sort | bitcoin price manipulation regulation from a game perspective |
| topic | bitcoin price manipulation game model behavioral finance financial regulation |
| url | https://www.sciopen.com/article/10.23919/JSC.2023.0027 |
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