Jun

17

Starling flockHere is an interesting study I read in Wired. I wonder if anything useful can be applied to markets that suddenly move en masse with funds buying or selling in unison as a result of an outside stimulus?

Amazing Starling Flocks Are Flying Avalanches

To watch the uncanny synchronization of a starling flock in flight is to wonder if the birds aren't actually a single entity, governed by something beyond the usual rules of biology. New research suggests that's true.

Mathematical analysis of flock dynamics show how each starling's movement is influenced by every other starling, and vice versa. It doesn't matter how large a flock is, or if two birds are on opposite sides. It's as if every individual is connected to the same network.

That phenomenon is known as scale-free correlation, and transcends biology. The closest fit to equations describing starling flock patterns come from the literature of "criticality," of crystal formation and avalanches — systems poised on the brink, capable of near-instantaneous transformation.

In starlings, "being critical is a way for the system to be always ready to optimally respond to an external perturbation, such as predator attack," wrote researchers led by University of Rome theoretical physicist Giorgio Parisi in a June 14 Proceedings of the National Academy of Sciences paper.

Parisi's team recorded starling flocks on the outskirts of Rome. Some had just over 100 birds, and others more than 4,000. Regardless of size, the correlations of a bird's orientation and velocity with the other birds' orientation and velocity didn't vary. If any one bird turned and changed speed, so would all the others.

In particle physics, synchronized orientation is found in systems with "low noise," in which signals are transmitted without degrading. But low noise isn't enough to produce synchronized speeds, which are found in critical systems. The researchers give the example of ferromagnetism, where particles in a magnet exhibit perfect interconnection at a precise, "critical" temperature.

"More analysis is necessary to prove this definitively, but our results suggest" that starling flocks are a critical system, said study co-author Irene Giardina, also a University of Rome physicist.

According to the researchers, the "most surprising and exotic feature" of the flocks was their near-instantaneous signal-processing speed. "How starlings achieve such a strong correlation remains a mystery to us," they wrote.


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Russ Sears comments:

It would seem to me that "scale free" correlation and one bird following another bird is a fairly parallel description of what happened with mortgages and the banks.

When regulators encourage investing in subprime, quasi regulators like the rating agencies turn a blind eye escalating risks outside their models and encourage economy of scale… no matter the scale and early entries appear to print money and apparently know where all the regulator stuffed bird feeder are….But unlike the flock size the markets all have their limits on supply and demand no matter how "synthetic" you make them it still comes down to this reality.

I will leave it to the reader to decide what this has to do with trading systems, risks managment and Mark to Model apprasials during booms and bust in home ownership.

Pitt T. Maner shares:

StarlingI found this unusual story from the UK, a "flight to safety" disaster:

A flock of starlings which died after they crashed on to a driveway could have confused the drive's shingle with reeds they could land in or might have been trying to escape a predator, experts suggested today.The flock of 76 birds crashed into the ground because of a "fatal error" in their flight, according to an inquiry led by the Veterinary Laboratories Agency (VLA) wildlife group.

They could have crashed as they tried to escape a predator such as a sparrowhawk or become confused by traffic, light reflections or noise, experts at the VLA said.

The VLA also said the shingle on the drive was a similar colour to reed beds and the birds could have thought they were descending fast into tall reeds when they hit the ground.

The agency, along with Natural England and the RSPCA, carried out an investigation into the massdeath of the starlings after dead and dying birds were found littered across a garden in Somerset earlier this month.

Onlookers heard a whooshing sound before the birds were spotted falling from the sky and on to the driveway of a house in Coxley in good weather conditions on Sunday March 7.

Investigation of 60 birds found they were in good condition with no broken wings, legs or skulls but a number had damaged beaks and blood in their mouths.

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Jeff Rollert comments:

I suspect that the lead birds are self selecting, such that their responses are a nano second faster than the others. I've seen some of these models, and the real life "lead" birds never fly in a straight line.


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