Related papers: Risk in Network Economies
Understanding spreading dynamics will benefit society as a whole in better preventing and controlling diseases, as well as facilitating the socially responsible information while depressing destructive rumors. In network-based spreading…
We study contagion and systemic risk in sparse financial networks with balance-sheet interactions on a directed random graph. Each institution has homogeneous liabilities and equity, and exposures along outgoing edges are split equally…
The importance of adequately modeling credit risk has once again been highlighted in the recent financial crisis. Defaults tend to cluster around times of economic stress due to poor macro-economic conditions, {\em but also} by directly…
Distribution grid reliability and resilience has become a major topic of concern for utilities and their regulators. In particular, with the increase in severity of extreme events, utilities are considering major investments in distribution…
In the era of a growing population, systemic changes to the world, and the rising risk of crises, humanity has been facing an unprecedented challenge of resource scarcity. Confronting and addressing the issues concerning the scarce…
In the context of understanding the nature of the risk transformation process of the financial system we propose an iterative risk-trading game between several agents who build their trading strategies based on a general utility setting.…
We study a mathematical model of social diffusion on a symmetric weighted network where individual nodes' states gradually assimilate to local social norms made by their neighbors' average states. Unlike physical diffusion, this process is…
In this chapter, an input-output economic model with multiple interactive economic systems is considered. The model captures the multi-dimensional nature of the economic sectors or industries in each economic system, the interdependencies…
Income- and price-elasticity of demand quantify the responsiveness of markets to changes in income, and in prices, respectively. Under the assumptions of utility maximization and preference-independence (additive preferences), mathematical…
We study the optimal financing and dividend distribution problem with restricted dividend rates in a diffusion type surplus model where the drift and volatility coefficients are general functions of the level of surplus and the external…
Technology trends as digitalization and Industry 4.0 initiate a growing demand for new business models. Most of this models requires a fundamental shift of operational and financial risks between seller and buyer. A key question is…
Stochastic spreading models defined on complex network topologies are used to mimic the diffusion of diseases, information, and opinions in real-world systems. Existing theoretical approaches to the characterization of the models in terms…
The transient fluctuation of the prosperity of firms in a network economy is investigated with an abstract stochastic model. The model describes the profit which firms make when they sell materials to a firm which produces a product and the…
We introduce a probabilistic framework that represents stylized banking networks with the aim of predicting the size of contagion events. Most previous work on random financial networks assumes independent connections between banks, whereas…
To investigate the actual phenomena of transport on a complex network, we analysed empirical data for an inter-firm trading network, which consists of about one million Japanese firms and the sales of these firms (a sale corresponds to the…
We consider the diffusion of two alternatives in social networks using a game-theoretic approach. Each individual plays a coordination game with its neighbors repeatedly and decides which to adopt. As products are used in conjunction with…
Banking system crises are complex events that in a short span of time can inflict extensive damage to banks themselves and to the external economy. The crisis literature has so far identified a number of distinct effects or channels that…
The emergence of interconnected urban networks is a crucial feature of globalisation processes. Understanding the drivers behind the growth of such networks - in particular urban firm networks -, is essential for the economic resilience of…
Many natural, physical and social networks commonly exhibit power-law degree distributions. In this paper, we discover previously unreported asymmetrical patterns in the degree distributions of incoming and outgoing links in the…
We study investment and insurance demand decisions for an agent in a theoretical continuous-time expected utility maximization model that combines risky assets with an (exogenous) insurable background risk. This risk takes the form of a…