Related papers: Regression to the Tail: Why the Olympics Blow Up
Gambling is one of the basic economic activities that humans indulge in. An investigation of gambling activities provides deep insights into the economic actions of people and sheds lights on the study of econophysics. In this paper we…
Predicting the occurrence of tail events is of great importance in financial risk management. By employing the method of peak-over-threshold (POT) to identify the financial extremes, we perform a recurrence interval analysis (RIA) on these…
The increasing cost of electoral campaigns raises the need for effective campaign planning and a precise understanding of the return of such investment. Interestingly, despite the strong impact of elections on our daily lives, how this…
Lock-in, the escalating commitment of decision-makers to an ineffective course of action, has the potential to explain the large cost overruns in large scale transportation infrastructure projects. Lock-in can occur both at the…
Quantities with right-skewed distributions are ubiquitous in complex social systems, including political conflict, economics and social networks, and these systems sometimes produce extremely large events. For instance, the 9/11 terrorist…
We study rare events in the extreme value statistics of stochastic symmetric jump processes with power tails in the distributions of the jumps, using the big-jump principle. The principle states that in the presence of stochastic processes…
It's not unreasonable to think that in-game sporting performance can be affected partly by what takes place off the court. We can't observe what happens between games directly. Instead, we proxy for the possibility of athletes partying by…
This paper examines the behavior of the price of anarchy as a function of the traffic inflow in nonatomic congestion games with multiple origin-destination (O/D) pairs. Empirical studies in real-world networks show that the price of anarchy…
The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and…
The size distribution of planned and forced outages and following restoration times in power systems have been studied for almost two decades and has drawn great interest as they display heavy tails. Understanding of this phenomenon has…
The big jump principle is a well established mathematical result for sums of independent and identically distributed random variables extracted from a fat tailed distribution. It states that the tail of the distribution of the sum is the…
In a recent Nature paper, Gabaix et al. \cite{Gabaix03} presented a theory to explain the power law tail of price fluctuations. The main points of their theory are that volume fluctuations, which have a power law tail with exponent roughly…
Routing games are amongst the most studied classes of games. Their two most well-known properties are that learning dynamics converge to equilibria and that all equilibria are approximately optimal. In this work, we perform a stress test…
Scheduling a sports tournament is a complex optimization problem, which requires a large number of hard constraints to satisfy. Despite the availability of several such constraints in the literature, there remains a gap since most of the…
Forecasting the number of Olympic medals for each nation is highly relevant for different stakeholders: Ex ante, sports betting companies can determine the odds while sponsors and media companies can allocate their resources to promising…
Resilience risk metrics must address the customer cost of the largest blackouts of greatest impact. However, there are huge variations in blackout cost in observed distribution utility data that make it impractical to properly estimate the…
We construct a two-tailed peak-over-threshold Hawkes model that captures asymmetric self- and cross-excitation in and between left- and right-tail extreme values within a time series. We demonstrate its applicability by investigating…
We consider a class of multiplicative processes which, added with stochastic reset events, give origin to stationary distributions with power-law tails -- ubiquitous in the statistics of social, economic, and ecological systems. Our main…
The prediction and control of rare events is an important task in disciplines that range from physics and biology, to economics and social science. The Big Jump principle deals with a peculiar aspect of the mechanism that drives rare…
In the Olympic Games, professional athletes representing their nations compete regardless of economic, political and cultural differences. In this study, we apply gravity model to observe characteristics, represented by distances among…