Innovation and Regulation - Bios

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Titles and Abstracts

Dan Rockmore, External Professor, Santa Fe Institute and Dartmouth College

David Krakauer, Chair of Faculty and Professor, Santa Fe Institute

Modes of Regulation in Biological Evolution: Programs versus Selective Arenas

Evolution by natural selection generates ordered states in appropriate environments by moving mutational quasi-species (populations of mutants about a wild-type) towards adaptive optima. This is associated with random variation and the loss of many genomes. By contrast, development is traditionally thought to generate ordered states during a single lifetime by moving growing populations of cells towards phenotypic optima. This is associated with programmed variability among daughter cells and a minimum of cell death. In small organisms (small numbers of cells with low rates of developmental error), development is highly regulated with each cell fate strictly determined. In large organisms with larger rates of error, development re-introduces a form of developmental natural selection into the production of organisms. This developmental form of natural selection is called arena selection. I shall discuss a few of the implications of arena selection for the regulation of complex social systems. Biology tells us that strict forms of regulation are not workable in large populations with large rates of error. However, multiple, carefully controlled selective arenas, can generate robust function.

Jessica Flack, Research Professor, Santa Fe Institute

The Evolutionary and Experimental Logic of Robustness in Biological & Social Systems

I will discuss principles for robust design in biological and social organization, focusing on regulatory solutions to perturbations caused by uninformative or misleading fluctuations in component behavior and component conflict, error and failure. I will discuss how the logic of experimental design can reveal the logic of robust evolutionary design. I will illustrate these points through case studies of robustness in the internet, gene regulatory networks, and animal social systems.

Daniel Schrag, External Professor and Science Board, Santa Fe Institute and Harvard University

Regulation and the Environment: Methane and the Tundra

Abstract coming soon...

Andrew W. Lo, Director, Laboratory for Financial Engineering, MIT

Regulation as Adaptation to Behavioral Biases

The current financial crisis has renewed political interest in increasing regulatory oversight of financial markets, despite the fact that the banking and insurance industries – two of the most highly regulated industries in the global economy – are at the center of the crisis. In this talk, I will review the basic economics of regulation, as well as the theory of "normal accidents", and provide a new perspective based on the psychology of fear and greed. Although complexity and tight coupling are contributing factors in the current crisis, a third element involving prosperity-induced risk tolerance may be even more significant. I will conclude with some suggestions for incorporating investor psychology directly into financial regulations.

John Clippinger, Senior Fellow, The Berkman Center for Internet and Society, Harvard Law School

Finance 3.0: Architecting Trusted, Transparent and Self-Governing Financial Networks

The current financial crisis has forced a rethinking of the architecture of the financial system, specifically, how to provide robust trust and transparency, while at the same time, encouraging innovation. Rather than turning to worn out regulatory methods, there may be an opportunity to design into financial networks mechanisms to achieve these goals, such as, auto-auditing, robust reputations, authentication, independent rating, and principled self-governance. I will report on the research at the Law Lab to build a cloud platform to implement and pilot test some of the requisite principles and mechanisms to create trusted, resilient networks and then provide an example of a project at the Law Lab at Harvard to develop digital governance mechanisms for a virtual LLC in Vermont. The final part of my talk will argue for an evolutionary biological and complexity sciences approach to designing digital institutions and agreements appropriate to the complexities of a globally networked environment. Digitalization has radically reduced information asymmetries and the coordination costs for collective action. Hence, we are likely to see fundamentally new forms of collective organization.

Sean Belka, Senior Vice President and Director of FCAT Idea Ecosystem