This talk describes recent progress on several related projects which are incorporating principles and mechanisms from immunology into computer security and how ideas from computer science are being applied to the design of vaccines for mutating viruses, such as influenza. In 1998 there were financial crises all over the world. Many hedge funds were caught in the crisis in October of 1998, reliving similar events that occurred in 1994. The speaker presents some reasons for the occurrence of such financial turmoil. He will also explain what mortgage hedge funds do, what their models are, and how those models are connected to Santa Fe style research.
Financial markets are dynamic.
Prices vary every day, often without discernable news, and markets sometimes seem to have a mind of their own. The speaker presents a simple model in which agents compete with each other using simple rules, and are selected based on their profits and losses. This selection mechanism is culturally plausible, and is mathematically analogous to models for reinforcement learning in the brain. The price varies all the time, even without any input of information. Speculators learn but never entirely eliminate patterns in prices.