From High Frequency Trading to Self-Organizing Moral Machines

Abstract

Technology is responsible for major systemic changes within the global financial sector in general and particularly in the trade in financial products. The global financial sector has already developed into a comprehensive network of mutually connected people and computers that are constantly evaluating and approving millions of transactions. Algorithms play a crucial role within this global financial network. An algorithm is in essence merely a set of instructions developed by one or more people with the intention of having these instructions performed by a machine such as a computer, a software robot or a physical robot in order to realize an ideal result. As part of a development in which we as human beings have ever higher expectations of algorithms and these algorithms become ever more autonomous in their actions, we cannot avoid including possibilities in these algorithms that enable ethical or more considerations. To develop this ethical or moral consideration, we need a kind of ethical framework which can be used for developing algorithms. With the development of such a framework we can start to think about what we as human beings consider to be moral action by machines within the financial sector based on such a framework.

When Humans Using the IT Artifact Becomes IT Using the Human Artifact

“…First, let us clarify that it is beyond the scope of this paper to organize and/or deconstruct all the technologically-oriented incidents behind the events of May 6, 2010 (what has become known as the "Flash Crash of 2:45"). Indeed, there remain several conflicting aspects on these events [22,32,40,44,46] so we will focus here only on a handful of critical aspects that illustrate how the demand for increasing computerization is framing the interactions between humans and machines. In this regard, we would also like to highlight that the complexity of this case has also been attributed to the multi-faceted role of algorithmic traders who make it almost impossible to deconstruct the case; this is acknowledged in several reports (see below).…”

“…The very existence of unpredictable phenomena that emerge from such technological interactions is a testament to the fact that the correspondence between inputs and outputs in this context is non-linear. As technology becomes responsible for "major systemic changes within the global financial sector…and as algorithms become ever more autonomous… we need a kind of ethical framework for developing algorithms" [44].…”