Systemic failures and organizational risk management in algorithmic trading: Normal accidents and high reliability in

Bo Hee Min1, Christian Borch1

  • 1Copenhagen Business School, Frederiksberg, Denmark.

Related Concept Videos

Systematic Error: Methodological and Sampling Errors01:15

Systematic Error: Methodological and Sampling Errors

In the case of systematic errors, the sources can be identified, and the errors can be subsequently minimized by addressing these sources. According to the source, systematic errors can be divided into sampling, instrumental, methodological, and personal errors.
Sampling errors originate from improper sampling methods or the wrong sample population. These errors can be minimized by refining the sampling strategy. Defective instruments or faulty calibrations are the sources of instrumental...
4.7K
Trial and Error and Algorithm01:12

Trial and Error and Algorithm

A problem-solving strategy is a plan of action used to find a solution. Different strategies have distinct action plans. Trial and error involves trying different solutions until one works. For instance, to fix a broken printer, you might check ink levels, ensure the paper tray isn't jammed, and verify the printer's connection to your laptop. This method can be time-consuming but is commonly used. Thomas Edison, for example, used trial and error to find a suitable filament for the light...
214
Mechanistic Models: Compartment Models in Algorithms for Numerical Problem Solving01:29

Mechanistic Models: Compartment Models in Algorithms for Numerical Problem Solving

Mechanistic models play a crucial role in algorithms for numerical problem-solving, particularly in nonlinear mixed effects modeling (NMEM). These models aim to minimize specific objective functions by evaluating various parameter estimates, leading to the development of systematic algorithms. In some cases, linearization techniques approximate the model using linear equations.
In individual population analyses, different algorithms are employed, such as Cauchy's method, which uses a...
123
Distribution Reliability and Automation01:25

Distribution Reliability and Automation

Distribution reliability in electrical power systems is critical for ensuring an uninterrupted power supply to consumers at minimal cost. According to IEEE Standard Terms, reliability is the probability that a device will function without failure over a specified time period or amount of usage. For electric power distribution, this translates to maintaining continuous power supply and addressing customer concerns over power outages. Several indices, as defined by IEEE Standard 1366-2012, are...
181
Propagation of Uncertainty from Systematic Error01:10

Propagation of Uncertainty from Systematic Error

The atomic mass of an element varies due to the relative ratio of its isotopes. A sample's relative proportion of oxygen isotopes influences its average atomic mass. For instance, if we were to measure the atomic mass of oxygen from a sample, the mass would be a weighted average of the isotopic masses of oxygen in that sample. Since a single sample is not likely to perfectly reflect the true atomic mass of oxygen for all the molecules of oxygen on Earth, the mass we obtain from this...
1.0K
Multimachine Stability01:25

Multimachine Stability

Multimachine stability analysis is crucial for understanding the dynamics and stability of power systems with multiple synchronous machines. The objective is to solve the swing equations for a network of M machines connected to an N-bus power system.
In analyzing the system, the nodal equations represent the relationship between bus voltages, machine voltages, and machine currents. The nodal equation is given by:
251