Evolution of Market Microstructure in the Age of AI
How trading technology keeps reshaping who gets what at what price
Markets have been rebuilt five times over—from human traders to computer algorithms to AI agents—each shift changing what traders must reveal and what they can hide. At each step, new rules emerge that try to allocate goods fairly and efficiently, but trade-offs persist: speed, secrecy, and control over order sequencing remain in tension, and no design solves them all.
As AI agents increasingly execute trades and discover new strategies, market designers face a familiar but harder problem: preventing collusion, extracting unfair value, and ensuring ordinary traders aren't systematically disadvantaged. Understanding how past shifts in technology broke and remade market rules gives us tools to spot where the next generation of trading systems will fail—and where to intervene before they do.