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With the rise of computing and artificial intelligence, advanced modeling and forecasting has been applied to High Frequency markets. A crucial element of solid production modeling though relies on the investigation of data distributions…

Trading and Market Microstructure · Quantitative Finance 2021-10-27 Jeremy D. Turiel , Tomaso Aste

We develop a dynamic model of cascading failures in a financial network whereby cross-holdings are viewed as feedback, external assets investments as inputs and failure penalties as static nonlinearities. We provide sufficient milder and…

Optimization and Control · Mathematics 2023-07-06 Stefanny Ramirez , Maaike Odijk , Dario Bauso

A characteristic feature of complex systems in general is a tight coupling between their constituent parts. In complex socio-economic systems this kind of behavior leads to self-organization, which may be both desirable (e.g. social…

Statistical Finance · Quantitative Finance 2017-03-29 Aleksejus Kononovicius , Vygintas Gontis

A system is in a self-organized critical state if the distribution of some measured events (avalanche sizes, for instance) obeys a power law for as many decades as it is possible to calculate or measure. The finite-size scaling of this…

Statistical Mechanics · Physics 2007-05-23 Josue X. Carvalho , Carmen P. C. Prado

Many natural phenomena exhibit power law behaviour in the distribution of event size. This scaling is successfully reproduced by Self Organized Criticality (SOC). On the other hand, temporal occurrence in SOC models has a Poisson-like…

Statistical Mechanics · Physics 2009-11-11 Eugenio Lippiello , Lucilla de Arcangelis , Cataldo Godano

We study how large functional networks can grow stably under possible cascading overload failures and evaluated the maximum stable network size above which even a small-scale failure would cause a fatal breakdown of the network. Employing a…

Physics and Society · Physics 2017-11-01 Shogo Mizutaka , Kousuke Yakubo

Tree-grass coexistence in savanna ecosystems depends strongly on environmental disturbances out of which crucial is fire. Most modeling attempts in the literature lack stochastic approach to fire occurrences which is essential to reflect…

Probability · Mathematics 2018-11-20 Paweł Klimasara , Marta Tyran-Kamińska

In social networks, bursts of activity often result from the imitative behavior between interacting agents. The Ising model, along with its variants in the social sciences, serves as a foundational framework to explain these phenomena…

Adaptation and Self-Organizing Systems · Physics 2023-08-29 Sornette Didier , Sandro Lera , Jianhong Lin , Ke Wu

We discuss the properties of a self--organized critical forest--fire model which has been introduced recently. We derive scaling laws and define critical exponents. The values of these critical exponents are determined by computer…

Condensed Matter · Physics 2009-10-22 S. Clar , B. Drossel , F. Schwabl

The mechanisms underlying cascading failures are often modeled via the paradigm of self-organized criticality. Here we introduce a simple model where nodes self-organize to be either weak or strong to failure which captures the trade-off…

Physics and Society · Physics 2018-09-12 Yuansheng Lin , Keith Burghardt , Martin Rohden , Pierre-André Noël , Raissa M. D'Souza

The question we address here is of whether phenomena of collective bankruptcies are related to self-organized criticality. In order to answer it we propose a simple model of banking networks based on the random directed percolation. We…

Statistical Mechanics · Physics 2009-11-07 Agata Aleksiejuk , Janusz A. Holyst , Gueorgi Kossinets

We study extreme events of avalanche activities in finite-size two-dimensional self-organized critical (SOC) models, specifically the stochastic Manna model (SMM) and the Bak-Tang-Weisenfeld (BTW) sandpile model. Employing the approach of…

Statistical Mechanics · Physics 2026-05-18 Abdul Quadir , Haider Hasan Jafri

We propose a simple model that aims at describing, in a stylized manner, how local breakdowns due unbalances or congestion propagate in real dynamical networks. The model converges to a self-organized critical stationary state in which the…

Statistical Mechanics · Physics 2007-05-23 Ginestra Bianconi , Matteo Marsili

How, and to what extent, does an interconnected financial system endogenously amplify external shocks? This paper attempts to reconcile some apparently different views emerged after the 2008 crisis regarding the nature and the relevance of…

Risk Management · Quantitative Finance 2016-08-30 Gabriele Visentin , Stefano Battiston , Marco D'Errico

Failure statistics of banks in the US show that their sizes are highly unequal (ranging from a few tens of thousands to over a billion dollars) and also, they come in `waves' of intermittent activities. This motivates a self-organized…

Physics and Society · Physics 2024-01-11 Soumyajyoti Biswas , Bikas K. Chakrabarti

Extreme events, such as market crashes, natural disasters, and pandemics, are rare but catastrophic, often triggering cascading failures across interconnected systems. Accurate prediction and early warning can help minimize losses and…

Machine Learning · Computer Science 2025-06-10 Jingyi Gu , Xuan Zhang , Guiling Wang

Avalanches, or Avalanche-like, events are often observed in the dynamical behaviour of many complex systems which span from solar flaring to the Earth's crust dynamics and from traffic flows to financial markets. Self-organized criticality…

Data Analysis, Statistics and Probability · Physics 2009-11-13 M. Bartolozzi

We study simultaneous price drops of real stocks and show that for high drop thresholds they follow a power-law distribution. To reproduce these collective downturns, we propose a minimal self-organized model of cascade spreading based on a…

Physics and Society · Physics 2015-03-13 Stanislao Gualdi , Matus Medo , Yi-Cheng Zhang

The frequency of disruptive and newly emerging threats (e.g. man-made attacks--cyber and physical attacks; extreme natural events--hurricanes, earthquakes, and floods) has escalated dramatically in the last decade. Impacts of these events…

Systems and Control · Electrical Eng. & Systems 2020-09-08 Narayan Bhusal , Mukesh Gautam , Michael Abdelmalak , Mohammed Benidris

In the last decade, several models with network adaptive mechanisms (link deletion-creation, dynamic synapses, dynamic gains) have been proposed as examples of self-organized criticality (SOC) to explain neuronal avalanches. However, all…

Adaptation and Self-Organizing Systems · Physics 2018-10-15 O. Kinouchi , L. Brochini , A. A. Costa , J. G. F. Campos , M. Copelli