Project EMC2

Emergence of Money with Cognitive Computational Agents

About the Project

EMC2 builds on the two parallel streams of research developed in SKEMA and I3S. It aims at using new methodology from computer science in order to find answers to important questions in social sciences. More precisely, we plan to use empirically-guided cognitive agent based methodology to model the emergence of money in decentralized trading systems.

The current rise of crypto-currencies (i.e. Bitcoin, Ethereum) in decentralized trading systems has given a new impetus to the research agenda of the emergence of money. The first step in understanding the potential effect of such crypto-currencies on economic and social systems is to produce theoretical models where money emerges endogenously. These models can be further tweaked in order to chart the possible future paths of our social system.

EMC2 aims at taking the first step in this direction. Previous research of the team has identified precise problems with development of computational models with cognitive agents that will be adequate for studying emergence of money.  Therefore, as the first step of the project, human-subject online experiments will be conducted using the Mechanical Turk service. In these experiments humans will be placed in environments facing automated agents. Automated agents will make sure that speculation is the most profitable behavior from the side of the human subject. Speculative behavior is necessary in order to generate money emergence in decentralized markets. Human subject behavior will be closely monitored in order to extract guiding characteristics for discrimination across fundamentalist and speculative behavior. These specific traits will be further incorporated into the computational model. That will be built at the second stage of the project.