Related papers: Big is Fragile: An Attempt at Theorizing Scale
Public blockchains should be able to scale with respect to the number of nodes and to the transactions workload. The blockchain scalability trilemma has been informally conjectured. This is related to scalability, security and…
In this paper we test computationally the performance of CAPM in an evolutionary setting. In particular we study the stability of wealth distribution in a financial market where some traders invest as prescribed by CAPM and others behave…
A general theory of innovation and progress in human society is outlined, based on the combat between two opposite forces (conservatism/inertia and speculative herding "bubble" behavior). We contend that human affairs are characterized by…
Robustness is often regarded as a critical future challenge for real-world applications, where stability is essential. However, as models often learn tasks in a similar order, we hypothesize that easier tasks will be easier regardless of…
We study the feasibility and noise sensitivity of portfolio optimization under some downside risk measures (Value-at-Risk, Expected Shortfall, and semivariance) when they are estimated by fitting a parametric distribution on a finite sample…
Self-stabilization is a strong property that guarantees that a network always resume correct behavior starting from an arbitrary initial state. Weaker guarantees have later been introduced to cope with impossibility results: probabilistic…
We point out some major drawbacks in random trading market models and propose a realistic modification which overcomes such drawbacks through `sensible trading'. We apply such trading policy in different situations: a) Agents with zero…
The recent trend for acquiring big data assumes that possessing quantitatively more and qualitatively finer data necessarily provides an advantage that may be critical in competitive situations. Using a model complex adaptive system where…
We develop a theoretical framework to investigate the link between rising scale economies and stagnating productivity. Our model features heterogeneous firms, imperfect competition, and firm selection. We demonstrate that scale economies…
Interdependent networks have been shown to be extremely vulnerable based on the percolation model. Parshani et. al further indicated that the more inter-similar networks are, the more robust they are to random failure. Our understanding of…
We show that financial correlations exhibit a non-trivial dynamic behavior. We introduce a simple phenomenological model of a multi-asset financial market, which takes into account the impact of portfolio investment on price dynamics. This…
A simple banking network model is proposed which features multiple waves of bank defaults and is analytically solvable in the limiting case of an infinitely large homogeneous network. The model is a collection of nodes representing…
Venture capital outcomes are dominated by a small number of extreme successes, making it difficult to distinguish investor skill from favorable realizations in a highly skewed return distribution. We study this question by comparing…
Positive experience of agile development methods in smaller projects has created interest in the applicability of such methods in larger scale projects. However, there is a lack of conceptual clarity regarding what large-scale agile…
Blockchain like Bitcoin and Ethereum suffer from scalability issues. Sharding is one of the most promising and leading solutions to scale blockchain. The basic idea behind sharding is to divide the blockchain network into multiple…
Electrical power systems are one of the most important infrastructures that support our society. However, their vulnerabilities have raised great concern recently due to several large-scale blackouts around the world. In this paper, we…
The dynamic network of relationships among corporations underlies cascading economic failures including the current economic crisis, and can be inferred from correlations in market value fluctuations. We analyze the time dependence of the…
Excessive leverage, i.e. the abuse of debt financing, is considered one of the primary factors in the default of financial institutions. Systemic risk results from correlations between individual default probabilities that cannot be…
A theoretical scaling law for the size effect of the strength of brittle materials is presented. To some extend, it can be seen as an extension of the well known Weibull law. For that a correlated Random Fields is used to model the…
Specialization and diversification are two major strategies that complex systems might exploit. Given a fixed amount of resources, the question is whether to invest this in elements that respond in a correlated manner to external…