Abrupt rise of new machine ecology beyond human response time

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Figure: Empirical transition in size distribution for UEEs with duration above threshold t, as function of t. (A) Scale of times. 650 ms is the time for chess grandmaster to discern King is in checkmate. Plots show results of the best-fit power-law exponent (black) and goodness-of-fit (blue) to the distributions for size of (B) crashes, and (C) spikes, as shown in the inset schematic.

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. 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