Algorithmic Collusion: When AI Learns to Cheat the Market
Algorithmic Collusion: When AI Learns to Cheat the Market The Game Nobody Told You Was Being Played Imagine two rival hedge funds — fierce competitors, no shared phone calls, no back-channel emails, no secret handshakes. Yet their trading algorithms quietly converge on the same strategy, one that systematically extracts profits from everyone else in the market. No conspiracy. No intent. Just two machines that independently discovered the same profitable truth: cooperation pays. This isn't a hypothetical. It's an emerging reality that researchers at the Wharton School and NYU Law have been documenting with increasing urgency. It's called algorithmic collusion , and it represents one of the most consequential — and least understood — shifts in modern financial power dynamics. If you're building wealth in today's markets, understanding this game is no longer optional. What Is Algorithmic Collusion? Algorithmic collusion occurs when competing AI-powered trading sys...