Society's techno-social systems are becoming ever faster and more computer-orientated. However, far from simply generating faster versions of existing behaviour, we show that this speed-up can generate a new behavioural regime as humans lose the ability to intervene in real time. Analyzing millisecond-scale data for the world's largest and most powerful techno-social system, the global financial market, we uncover an abrupt transition to a new all-machine phase characterized by large numbers of subsecond extreme events. The proliferation of these subsecond events shows an intriguing correlation with the onset of the system-wide financial collapse in 2008. Our findings are consistent with an emerging ecology of competitive machines featuring ‘crowds’ of predatory algorithms, and highlight the need for a new scientific theory of subsecond financial phenomena.

 

Abrupt rise of new machine ecology beyond human response time
Neil Johnson Guannan Zhao Eric Hunsader Hong Qi Nicholas Johnson Jing Meng Brian Tivnan

Scientific Reports 3, Article number: 2627 http://dx.doi.org/10.1038/srep02627


Via Complexity Digest