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We study an extension of Duncan Watts' 2002 model of information cascades in social networks where edge weights are taken to be random, an innovation motivated by recent applications of cascade analysis to systemic risk in financial…

Physics and Society · Physics 2012-11-27 T. R. Hurd , James P. Gleeson

We present a model of worldwide crisis contagion based on the Google matrix analysis of the world trade network obtained from the UN Comtrade database. The fraction of bankrupted countries exhibits an \textit{on-off} phase transition…

Trading and Market Microstructure · Quantitative Finance 2020-09-22 Célestin Coquidé , José Lages , Dima L. Shepelyansky

We study how large functional networks can grow stably under possible cascading overload failures and evaluated the maximum stable network size above which even a small-scale failure would cause a fatal breakdown of the network. Employing a…

Physics and Society · Physics 2017-11-01 Shogo Mizutaka , Kousuke Yakubo

The emergence and evolution of real-world systems have been extensively studied in the last few years. However, equally important phenomena are related to the dynamics of systems' collapse, which has been less explored, especially when they…

Physics and Society · Physics 2019-09-27 Jie Li , Chengyi Xia , Gaoxi Xiao , Yamir Moreno

Interdependencies are ubiquitous throughout the world. Every real-world system interacts with and is dependent on other systems, and this interdependency affects their performance. In particular, interdependencies among networks make them…

Physics and Society · Physics 2018-07-18 Cristian E. La Rocca , H. Eugene Stanley , Lidia A. Braunstein

In this paper, we introduce a distributed control strategy to prevent dynamically-induced cascading failures in power grids. We model power grids using complex networks and nonlinear dynamics to provide a coarse-grained description of the…

Systems and Control · Electrical Eng. & Systems 2022-02-08 Mattia Frasca , Lucia Valentina Gambuzza

We consider a model of contagion in financial networks recently introduced in the literature, and we characterize the effect of a few features empirically observed in real networks on the stability of the system. Notably, we consider the…

General Finance · Quantitative Finance 2011-09-07 Fabio Caccioli , Thomas A. Catanach , J. Doyne Farmer

Modern network-like systems are usually coupled in such a way that failures in one network can affect the entire system. In infrastructures, biology, sociology, and economy, systems are interconnected and events taking place in one system…

Data Analysis, Statistics and Probability · Physics 2010-12-02 S. Havlin , N. A. M. Araujo , S. V. Buldyrev , C. S. Dias , R. Parshani , G. Paul , H. E. Stanley

Considering the attacks against the power grid, one of the most effective approaches could be the attack to the transmission lines that leads to large cascading failures. Hence, the problem of locating the most critical or vulnerable…

Machine Learning · Computer Science 2024-05-21 Tianxin Zhou , Xiang Li , Haibing Lu

A significant amount of society's infrastructure can be modeled using graph structures, from electric and communication grids, to traffic networks, to social networks. Each of these domains are also susceptible to the cascading spread of…

Social and Information Networks · Computer Science 2024-04-24 James D. Cunningham , Conrad S. Tucker

Machine Learning models capable of handling the large datasets collected in the financial world can often become black boxes expensive to run. The quantum computing paradigm suggests new optimization techniques, that combined with classical…

We study cascading failures in a system comprising interdependent networks/systems, in which nodes rely on other nodes both in the same system and in other systems to perform their function. The (inter-)dependence among nodes is modeled…

Applications · Statistics 2018-02-13 Richard J. La

Over the last two decades, financial systems have been studied and analysed from the perspective of complex networks, where the nodes and edges in the network represent the various financial components and the strengths of correlations…

Statistical Finance · Quantitative Finance 2021-02-02 Areejit Samal , Sunil Kumar , Yasharth Yadav , Anirban Chakraborti

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:…

General Economics · Economics 2026-05-15 Simon Scheidegger

Financial contagion has been widely recognized as a fundamental risk to the financial system. Particularly potent is price-mediated contagion, wherein forced liquidations by firms depress asset prices and propagate financial stress,…

Computational Finance · Quantitative Finance 2023-10-06 Zhiyu Cao , Zihan Chen , Prerna Mishra , Hamed Amini , Zachary Feinstein

We develop a structural default model for interconnected financial institutions in a probabilistic framework. For all possible network structures we characterize the joint default distribution of the system using Bayesian network…

Risk Management · Quantitative Finance 2018-07-02 Carsten Chong , Claudia Klüppelberg

The risk of conflict is exasperated by a multitude of internal and external factors. Current multivariate analysis paints diverse causal risk profiles that vary with time. However, these profiles evolve and a universal model to understand…

Physics and Society · Physics 2019-09-30 Gerardo Aquino , Weisi Guo , Alan Wilson

Real systems are usually composed by units or nodes whose activity can be interrupted and restored intermittently due to complex interactions not only with the environment, but also with the same system. Majdand\v{z}i\'c $et\;al.$ [Nature…

Physics and Society · Physics 2016-09-20 L. D. Valdez , M. A. Di Muro , L. A. Braunstein

Simulating potential cascading failures can be useful for avoiding or mitigating such events. Currently, existing steady-state analysis tools are ill-suited for simulating cascading outages as they do not model frequency dependencies, they…

Signal Processing · Electrical Eng. & Systems 2019-11-25 Amritanshu Pandey , Aayushya Agarwal , Marko Jereminov , Martin R. Wagner , David M. Bromberg , Larry Pileggi

A geometric model of a physical network affected by a disaster is proposed and analyzed using integral geometry (geometric probability). This analysis provides a theoretical method of evaluating performance metrics, such as the probability…

Networking and Internet Architecture · Computer Science 2013-12-30 Hiroshi Saito