Related papers: Dynamic Interventions for Networked Contagions
In economic settings such as learning, social behavior, and financial contagion, agents interact through interdependent networks. This paper examines how a decision maker (DM) can design an optimal intervention strategy under network…
This paper proposes a novel dynamical model for determining clearing payments in financial networks. We extend the classical Eisenberg-Noe model of financial contagion to multiple time periods, allowing financial operations to continue…
This paper studies the problem of intervention design for steering the actions of noncooperative players in quadratic network games to the social optimum. The players choose their actions with the aim of maximizing their individual payoff…
We model the default contagion process in a large heterogeneous financial network under the interventions of a regulator (a central bank) with only partial information which is a more realistic setting than most current literature. We…
We consider optimal intervention in the Elliott-Golub-Jackson network model \cite{jackson14} and we show that it can be transformed into an influence maximization-like form, interpreted as the reverse of a default cascade. Our analysis of…
We consider two optimization problems in which a planner aims to influence the average transient opinion in the Friedkin-Johnsen dynamics on a network by intervening on the agents' innate opinions. Solving these problems requires full…
The events of the last few years revealed an acute need for tools to systematically model and analyze large financial networks. Many applications of such tools include the forecasting of systemic failures and analyzing probable effects of…
This paper studies the problem of optimally allocating a cash injection into a financial system in distress. Given a one-period borrower-lender network in which all debts are due at the same time and have the same seniority, we address the…
We study a network design problem (NDP) where the planner aims at selecting the optimal single-link intervention on a transportation network to minimize the travel time under Wardrop equilibrium flows. Our first result is that, if the delay…
In this study, we investigate the under-explored intervention planning aimed at disseminating accurate information within dynamic opinion networks by leveraging learning strategies. Intervention planning involves identifying key nodes…
We consider a multi-user network where a network manager and selfish users interact. The network manager monitors the behavior of users and intervenes in the interaction among users if necessary, while users make decisions independently to…
In this paper we introduce a generalized extension of the Eisenberg-Noe model of financial contagion to allow for time dynamics of the interbank liabilities, including a dynamic examination of default risk. This framework separates the cash…
A key problem in network theory is how to reconfigure a graph in order to optimize a quantifiable objective. Given the ubiquity of networked systems, such work has broad practical applications in a variety of situations, ranging from drug…
We propose a generic system model for a special category of interdependent networks, demand-supply networks, in which the demand and the supply nodes are associated with heterogeneous loads and resources, respectively. Our model sheds a…
The current global financial system forms a highly interconnected network where a default in one of its nodes can propagate to many other nodes, causing a catastrophic avalanche effect. In this paper we consider the problem of reducing the…
In this work we introduce a model of default contagion that combines the approaches of Eisenberg-Noe interbank networks and dynamic mean field interactions. The proposed contagion mechanism provides an endogenous rule for early defaults in…
Widespread default involves substantial deadweight costs which could be countered by injecting capital into failing firms. Injections have positive spillovers that can trigger a repayment cascade. But which firms should a regulator bailout…
We study the incentives of banks in a financial network, where the network consists of debt contracts and credit default swaps (CDSs) between banks. One of the most important questions in such a system is the problem of deciding which of…
In the context of containment of default contagion in financial networks, we here study a regulator that allocates pre-shock capital or liquidity buffers across banks connected by interbank liabilities and common external asset exposures.…
Targeted interventions in games present a challenging problem due to the asymmetric information available to the regulator and the agents. This note addresses the problem of steering the actions of self-interested agents in quadratic…