Tag: analysis

Robot Traders

The trading bots visualized in the stock charts in this story aren’t doing anything that could be construed to help the market. Unknown entities for unknown reasons are sending 1000s of orders a second through the electronic stock exchanges with no intent to actually trade. Often, the buy or sell prices that they are offering are so far from the market price that there’s no way they’d ever be part of a trade. The bots sketch out odd patterns with their orders, leaving patterns in the data that are largely invisible to market participants.

just robot traders crossing in the night, or deliberate addition of noise?

Group think

To understand why this technology is so important, and so dangerous, you need to understand its patrimony. First, although the technology is brand new, the idea is a classic, long-time geek trope. It shows up, for example, in Isaac Asimov’s Foundation Trilogy, the best-selling albeit thinly-plotted space opera, in which protagonist Hari Seldon develops the science of “psychohistory”. Just as physics can predict the mass motion of a gas, even though any individual molecule is unpredictable, psychohistory allows us to predict the future of large groups of people. (It’s not hard to see why this sort of thing appeals to the socially maladroit. Forming cliques, establishing social ties– it’s complicated and messy stuff. If only there was a mathematics that laid it all out…)

But why is this technology only emerging now, not 15 or 20 years ago? For any technology, there are only 3 possible answers to this question: Moore’s law, the Internet, or the government. In the case of crowd dynamics, we have the last 2 to thank. The Internet has made the problem tractable by providing huge, easily-collected data sets of social interactions. But the government has been the real enabler. Just follow the money: nearly every relevant research project received funding from DARPA, the Defense Advanced Research Projects Agency.

the state of “human terrain” research, and its applications. shades of psychohistory.

New developments in AI

What to expect in the near-term is less clear. While strong AI still lies safely beyond the Maes-Garreau horizon1 (a vanishing point, perpetually 50 years ahead) a host of important new developments in weak AI are poised to be commercialized in the next few years. But because these developments are a paradoxical mix of intelligence and stupidity, they defy simple forecasts, they resist hype. They are not unambiguously better, cheaper, or faster. They are something new.

What are the implications of a car that adjusts its speed to avoid collisions … but occasionally mistakes the guardrail along a sharp curve as an oncoming obstacle and slams on the brakes? What will it mean when our computers know everything — every single fact, the entirety of human knowledge — but can only reason at the level of a cockroach?

autonomous driving and weak omniscience closer than you think. a joy to read.