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Don wrote:
"Maybe in the bowels of some underground bunker in North Dakota there is
55 massively parallel Cray computers orchestrating the buying of
stock...these computers are kept cool by liquid nitrogen stored in old
Minute Man missile silos."
Well Don you were close, only I don't think the computer is in North
Dakota. The government has been working on this for a few years now.
Since the cold war is pretty much a done deal, they have been looking for
alternative use's of the simulation technology developed at Los Alamos
and Sandia. The guys who started the Prediction Company used to work at
Los Alamos. And when the grant money for war technology started to dry up
they headed for Wall St. Here is an excerpt from the "ASPEN" site at
Sandia National Laboratories. This is the Alan Greenspan version of Trade
Station. Also you may be interested to know that Citigroup has had a big
hand in developing agent based computational models for economic
analysis.
http://www-aspen.cs.sandia.gov/index.html
New Economics Model Simulates U.S. Economy
Researchers at Sandia National Laboratories are developing a
microsimulation model of the US economy that has the potential to
significantly improve capabilities for analyzing and comparing economic
policies.
The new computational tool, called Aspen, capitalizes on Sandia's
expertise in both evolutionary learning and parallel computing to provide
several major advantages over more traditional economic models:
Models the economy in a single, consistent calculation.
Permits the impact of various legal, regulatory and policy changes such
as monetary policy, tax law, or trade policies to be modeled in greater
detail.
Allows different sectors of the economy to be analyzed independently
and/or integrated with other sectors to develop a better understanding of
the whole economic process.
Accurately simulates the behavior of basic decision-making segments
within the economy, like households, banks, companies, and government.
Aspen uses agents to represent the various decision-making segments in
the economy. Each segment may have one or more agents representing it in
an analysis. One of Aspen's key features is its ability to realistically
reproduce the process used by actual economic agents to maximize utility
or profit. Agents in Aspen not only can communicate with one another but
also make "real-life" decisions. Through use of evolutionary learning
techniques, the agents adapt their behavior according to changing
economic conditions and past experience. In other words, they become
smarter as they move through time.
Widespread applications
The model is designed to run on Sandia's massively parallel Intel
Teraflop computer, currently the world's fastest. Through its use,
researchers anticipate that the entire economy can be modeled in
sufficient detail to be realistic. This would give Aspen widespread
application in the following areas:
Economic and financial market forecasting for the government, banks,
brokerage firms, or venture capitalists.
Impact analysis of tax law or government policy changes.
Impact studies of technology shifts for industry, consumers, or market
research firms.
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