Impact of delayed information in sub-second complex systems

Abstract

What happens when you slow down the delivery of information in large-scale complex systems that operate faster than the blink of an eye? This question just adopted immediate commercial, legal and political importance following U.S. regulators’ decision to allow an intentional 350 microsecond delay to be added in the ultrafast network of financial exchanges. However there is still no scientific understanding available to policymakers of the potential system-wide impact of such delays. Here we take a first step in addressing this question using a minimal model of a population of competing, heterogeneous, adaptive agents which has previously been shown to produce similar statistical features to real markets. We find that while certain extreme system-level behaviors can be prevented by such delays, the duration of others is increased. This leads to a highly non-trivial relationship between delays and system-wide instabilities which warrants deeper empirical investigation. The generic nature of our model suggests there should be a fairly wide class of complex systems where such delay-driven extreme behaviors can arise, e.g. sub-second delays in brain function possibly impacting individuals’ behavior, and sub-second delays in navigational systems potentially impacting the safety of driverless vehicles.