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We address a fundamental problem that is systematically encountered when modeling complex systems: the limitedness of the information available. In the case of economic and financial networks, privacy issues severely limit the information…

Physics and Society · Physics 2015-12-07 Giulio Cimini , Tiziano Squartini , Diego Garlaschelli , Andrea Gabrielli

In this article the problem of reconstructing the pattern of connection between agents from partial empirical data in a macro-economic model is addressed, given a set of behavioral equations. This systemic point of view puts the focus on…

General Economics · Economics 2019-01-30 Aurélien Hazan

This work explores the characteristics of financial contagion in networks whose links distributions approaches a power law, using a model that defines banks balance sheets from information of network connectivity. By varying the parameters…

General Finance · Quantitative Finance 2014-10-10 Vanessa Hoffmann de Quadros , Juan Carlos González-Avella , José Roberto Iglesias

Modelling systems with networks has been a powerful approach to tame the complexity of several phenomena. Unfortunately, such an approach is often made difficult by the large number of variables to take into consideration. Methods of…

Physics and Society · Physics 2023-10-17 Gianmarco Ricciardi , Guido Montagna , Guido Caldarelli , Giulio Cimini

When investigating the spreading of a piece of information or the diffusion of an innovation, we often lack information on the underlying propagation network. Reconstructing the hidden propagation paths based on the observed diffusion…

Social and Information Networks · Computer Science 2019-04-05 Hao Liao , Ming-Kai Liu , Manuel Sebastian Mariani , Mingyang Zhou , Xingtong Wu

To capture the systemic complexity of international financial systems, network data is an important prerequisite. However, dyadic data is often not available, raising the need for methods that allow for reconstructing networks based on…

Applications · Statistics 2019-09-05 Michael Lebacher , Samantha Cook , Nadja Klein , Göran Kauermann

Novel method of reconstructing dynamical networks from empirically measured time series is proposed. By examining the variable--derivative correlation of network node pairs, we derive a simple equation that directly yields the adjacency…

Data Analysis, Statistics and Probability · Physics 2012-10-09 Zoran Levnajić

We discuss the systemic risk implied by the interbank exposures reconstructed with the maximum entropy method. The maximum entropy method severely underestimates the risk of interbank contagion by assuming a fully connected network, while…

Risk Management · Quantitative Finance 2017-03-16 M. Andrecut

Networks underpin systems that range from finance to biology, yet their structure is often only partially observed. Current reconstruction methods typically fit the parameters of a model anew to each snapshot, thus offering no guidance to…

Physics and Society · Physics 2026-05-28 Mattia Marzi , Tiziano Squartini

The global financial system can be represented as a large complex network in which banks, hedge funds and other financial institutions are interconnected to each other through visible and invisible financial linkages. Recently, a lot of…

Risk Management · Quantitative Finance 2018-04-11 Fabio Caccioli , Paolo Barucca , Teruyoshi Kobayashi

Human communication, the essence of collective social phenomena ranging from small-scale organizations to worldwide online platforms, features intense reciprocal interactions between members in order to achieve stability, cohesion, and…

This paper develops a continuous functional framework for analyzing contagion dynamics in financial networks, extending the Navier-Stokes-based approach to network-structured spatial processes. We model financial distress propagation as a…

Econometrics · Economics 2025-10-28 Tatsuru Kikuchi

This mini-project models propagation of shocks, in time point, through links in connected banks. In particular, financial network of 100 banks out of which 15 are shocked to default (that is, 85.00% of the banks are solvent) is modelled…

Statistical Finance · Quantitative Finance 2024-02-26 Sunday Akukodi Ugwu

We study the effects of nonreciprocity and network structure on percolation. To this end, we investigate nonreciprocal random networks - directed networks for which the probability of a link occurring from node i to node j differs from the…

Statistical Mechanics · Physics 2025-10-07 Chanania Steinbock

Reciprocal arcs represent the lowest order cycle possible to find in directed graphs without self-loops. Representing also a measure of feed-back between vertices, it is interesting to understand how reciprocal arcs influence other…

Statistical Mechanics · Physics 2011-05-23 Vinko Zlatić , Hrvoje Štefančić

The DebtRank algorithm has been increasingly investigated as a method to estimate the impact of shocks in financial networks, as it overcomes the limitations of the traditional default-cascade approaches. Here we formulate a dynamical…

Risk Management · Quantitative Finance 2018-11-21 Marco Bardoscia , Stefano Battiston , Fabio Caccioli , Guido Caldarelli

Network reconstruction consists in retrieving the hidden interaction structure of a system from observations. Many reconstruction algorithms have been proposed, although less research has been devoted to describe their theoretical…

Reconstructing patterns of interconnections from partial information is one of the most important issues in the statistical physics of complex networks. A paramount example is provided by financial networks. In fact, the spreading and…

Risk Management · Quantitative Finance 2018-07-20 Tiziano Squartini , Assaf Almog , Guido Caldarelli , Iman van Lelyveld , Diego Garlaschelli , Giulio Cimini

Network reconstruction is the first step towards understanding, diagnosing and controlling the dynamics of complex networked systems. It allows us to infer properties of the interaction matrix, which characterizes how nodes in a system…

Systems and Control · Computer Science 2016-01-12 Marco Tulio Angulo , Jaime A. Moreno , Albert-László Barabási , Yang-Yu Liu

We study the network reconstruction problem for an epidemic reaction-diffusion. These models are an extension of deterministic, compartmental models to a graph setting, where the reactions within the nodes are coupled by a diffusion. We…

Chaotic Dynamics · Physics 2021-09-24 Louis-Brahim Beaufort , Pierre-Yves Massé , Antonin Reboulet , Laurent Oudre