Related papers: Cascading Failures in the Global Financial System:…
Our society nowadays is governed by complex networks, examples being the power grids, telecommunication networks, biological networks, and social networks. It has become of paramount importance to understand and characterize the dynamic…
Cascading chains of events are a salient feature of many real-world social, biological, and financial networks. In social networks, social reciprocity accounts for retaliations in gang interactions, proxy wars in nation-state conflicts, or…
The theory of multilayer networks is in its early stages, and its development provides vital methods for understanding complex systems. Multilayer networks, in their multiplex form, have been introduced within the last three years to…
Robustness of routing policies for networks is a central problem which is gaining increased attention with a growing awareness to safeguard critical infrastructure networks against natural and man-induced disruptions. Routing under limited…
Interdependent networks are characterized by two kinds of interactions: The usual connectivity links within each network and the dependency links coupling nodes of different networks. Due to the latter links such networks are known to…
The 2008 financial crisis exposed fundamental vulnerabilities in interconnected banking systems, yet existing frameworks fail to integrate spatial propagation with network contagion mechanisms. This paper develops a unified spatial-network…
The negative externalities from an individual bank failure to the whole system can be huge. One of the key purposes of bank regulation is to internalize the social costs of potential bank failures via capital charges. This study proposes a…
The problem of cascading failures in cyber-physical systems is drawing much attention in lieu of different network models for a diverse range of applications. While many analytic results have been reported for the case of large networks,…
Economic interdependencies have become increasingly present in globalized production, financial and trade systems. While establishing interdependencies among economic agents is crucial for the production of complex products, they may also…
A networked system can fail when most of its components are unable to support flux through the nodes and edges. As studied earlier this scenario can be triggered by an external perturbation such as an intentional attack on nodes or for…
This paper considers the dynamics of edges in a network. The Dynamic Bond Percolation (DBP) process models, through stochastic local rules, the dependence of an edge $(a,b)$ in a network on the states of its neighboring edges. Unlike…
Since the latest financial crisis, the idea of systemic risk has received considerable interest. In particular, contagion effects arising from cross-holdings between interconnected financial firms have been studied extensively. Drawing…
We contribute to the understanding of how systemic risk arises in a network of credit-interlinked agents. Motivated by empirical studies we formulate a network model which, despite its simplicity, depicts the nature of interbank markets…
Financial transactions constitute connections between entities and through these connections a large scale heterogeneous weighted graph is formulated. In this labyrinth of interactions that are continuously updated, there exists a variety…
In this paper we study a simple cascading process in a structured heterogeneous population, namely, a network composed of two loosely coupled communities. We demonstrate that under certain conditions the cascading dynamics in such a network…
This script offers an implementation-oriented introduction to deep learning methods for solving and estimating high-dimensional dynamic stochastic models in economics and finance. Its starting point is the curse of dimensionality:…
Filiz et al. (2008) proposed a model for the pattern of defaults seen among a group of firms at the end of a given time period. The ingredients in the model are a graph, where the vertices correspond to the firms and the edges describe the…
In a cascading power transmission outage, component outages propagate non-locally, after one component outages, the next failure may be very distant, both topologically and geographically. As a result, simple models of topological contagion…
We study how the phenomenon of contagion can take place in the network of the world's stock exchanges due to the behavioral trait "blindeness to small changes". On large scale individual, the delay in the collective response may…
Cascading failures, triggered by a local perturbation, can be catastrophic and cause irreparable damages in a wide area. Hence, blocking the devastating cascades is an important issue in real world networks. One of the ways to control the…