Related papers: Big is Fragile: An Attempt at Theorizing Scale
A common problem in risk analysis is to characterize the overall security of a system of valuable assets (e.g., government buildings or communication hubs), and to suggest measures to mitigate any hazards or security threats. Currently,…
In complex systems like financial market, risk tolerance of individuals is crucial for system resilience.The single-security price limit, designed as risk tolerance to protect investors by avoiding sharp price fluctuation, is blamed for…
We consider materials whose mechanical integrity is the result of a jamming process. We argue that such media are generically "fragile": unable to support certain types of incremental loading without plastic rearrangement. Fragility is…
This paper studies the robustness of large-scale interconnected systems with respect to external disturbances, focussing on their scalability properties. Specifically, a notion of scalability is introduced that asks for these robustness…
We consider economic obstacles that limit the reliability and accuracy of value-at-risk (VaR). Investors who manage large market transactions should take into account the impact of the randomness of large trade volumes on predictions of…
The fragility of financial systems was starkly demonstrated in early 2023 through a cascade of major bank failures in the United States, including the second, third, and fourth largest collapses in the US history. The highly interdependent…
Formal explainability guarantees the rigor of computed explanations, and so it is paramount in domains where rigor is critical, including those deemed high-risk. Unfortunately, since its inception formal explainability has been hampered by…
Modern economies evolved from simpler human exchanges into very convoluted systems. Today, a multitude of aspects can be regulated, tampered with, or left to chance; these are economic {\em degrees of freedom} which together shape the flow…
Many complex systems exhibit extreme events far more often than expected for a normal distribution. This work examines how self-similar bursts of activity across several orders of magnitude can emerge from first principles in systems that…
The Economist recently reported that infrastructure spending is the largest it is ever been as a share of world GDP. With $22 trillion in projected investments over the next ten years in emerging economies alone, the magazine calls it the…
We define a novel quantitative strategy inspired by the ecological notion of nestedness to single out the scale at which innovation complexity emerges from the aggregation of specialized building blocks. Our analysis not only suggests that…
Trust is often conveyed through delegation, or through recommendation. This makes the trust authorities, who process and publish trust recommendations, into an attractive target for attacks and spoofing. In some recent empiric studies, this…
Robustness in response to unexpected events is always desirable for real-world networks. To improve the robustness of any networked system, it is important to analyze vulnerability to external perturbation such as random failures or…
Just like power, water and transportation systems, wireless networks are a crucial societal infrastructure. As natural and human-induced disruptions continue to grow, wireless networks must be resilient to unforeseen events, able to…
Most infrastructure networks evolve and operate in a decentralized fashion, which may adversely impact the allocation of resources across the system. Here we investigate this question by focusing on the relation between capacity and load in…
Language models famously improve under a smooth scaling law, but some specific capabilities exhibit sudden breakthroughs in performance. Advocates of "emergence" view these capabilities as unlocked at a specific scale, but others attribute…
Random shifting typically appears in credibility models whereas random scaling is often encountered in stochastic models for claim sizes reflecting the time-value property of money. In this article we discuss some aspects of random shifting…
Stochastic feedback systems give rise to a variety of notions of stability. The conditions for the stability of the median, mean, and variance stability conditions differ. These conditions can be stated explicitly for scalar discrete-time…
Why do capitalist economies recurrently generate crises whose severity is disproportionate to the size of the triggering shock? This paper proposes a structural answer grounded in the evolutionary geometry of production networks. As…
The volatility of financial instruments is rarely constant, and usually varies over time. This creates a phenomenon called volatility clustering, where large price movements on one day are followed by similarly large movements on successive…