The Earth Mark II
June 7, 2010 9:36 AM Subscribe
It's been described as
one of the most profound scientific initiatives of the 21st century - building an
Earth Simulator. Not to figure out icepack melt, calculate global climate patterns, predict earthquakes or determine once and for all 'What do you get when you multiply
six by nine'. No, this one's to prevent another kind of
meltdown.
FuturIcT, one of the European Union's flagship research initiatives, has been tasked with building the earth simulator. The project will apply complex systems theory, statistical physics and evolutionary
game theory to collect and organise data on social, economic and environmental processes at never before seen levels. To make this 'economic Manhattan project' work and still allow for the randomness that is human behavior, they are using Agent-based models.
Agent-based computational models can capture irrational behaviour, represent complex social networks and incorporate emergent patterns of complex systems. They have been used in the past to analyze epidemic spread, biowarfare threats, the growth and decline of ancient civilizations, and the human immune system. Now the EU wants to spend a billion Euros to see how Agent-based models could prevent another financial crisis. A big motivation for this is the feeling among some economists that
politicians are 'flying the economy by the seat of their pants.'
[Existing financial models] such as those used by the US Federal Reserve, by necessity stripped away most of the structure of a real economy. There are no banks or derivatives, much less sub-prime mortgages or credit default swaps — these introduce too much nonlinearity and complexity for equilibrium methods to handle. When it comes to setting policy, the predictions of these models aren’t even wrong, they are simply non-existent.
Agent-based models potentially present a way to model the financial economy as a complex system, as Keynes attempted to do, while taking human adaptation and learning into account...
There is also a sense that the complex nature of problems faced today "dwarfs the capacity of any individual's comprehension" and that "
humankind needs to integrate all its knowledge from all domains into new science able to address the new kinds of problem that emerge in our ever more connected world."
posted by the painkiller at 9:46 AM on June 7, 2010 [18 favorites]