Short numbers, page-47

This is essentially why short selling was introduced; not to regulate the market so much but to allow investors to step in and profit from overpriced shares (and as you point out effectively result in preventing prices to get out of control). However all this predates computers having direct access to the market and market data. In the same way that bigger players can artificially take advantage of temporary weaknesses in sell volune to create a frenzied market to follow the buying and then get out with decent profits before those that for caught up in it realise what the price probably should have peaked at, short selling allows the same in reverse. The trouble with short selling is that fear is a much stronger driver than greed for the average investor (so most are more susceptible to being manipulated by it), and moreover fearful investors vs greedy investors are probably the type of investor that a market, which was originally created to provide a mechanism for companies to fund their growth and reward investors from the profits they make as a result, wants to have around into the future. Like HFT, the market seems yet to find a way to regulate itself on the side of what the market needs in order to encourage investors to help businesses grow.