Related papers: Understanding Financial Contagion: A Complexity Mo…

We study proliferation of an action in binary action network coordination games that are generalized to include global effects. This captures important aspects of proliferation of a particular action or narrative in online social networks,…

A characteristic property of networks is their ability to propagate influences, such as infectious diseases, behavioral changes, and failures. An especially important class of such contagious dynamics is that of cascading processes. These…

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 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…

Spreading broadly refers to the notion of an entity propagating throughout a networked system via its interacting components. Evidence of its ubiquity and severity can be seen in a range of phenomena, from disease epidemics to financial…

We introduce a model for the loss distribution of a credit portfolio considering a contagion mechanism for the default of names which is the result of two independent components: an infection attempt generated by defaulting entities and a…

We study corruption as a generalized epidemic process on the graph of social relationships. The main difference to classical epidemic processes is the strong nonlinear dependence of the transmission probability on the local density of…

From pathogens and computer viruses to genes and memes, contagion models have found widespread utility across the natural and social sciences. Despite their success and breadth of adoption, the approach and structure of these models remain…

Contagion models are a primary lens through which we understand the spread of information over social networks. However, simple contagion models cannot reproduce the complex features observed in real-world data, leading to research on more…

The modeling of the probability of joint default or total number of defaults among the firms is one of the crucial problems to mitigate the credit risk since the default correlations significantly affect the portfolio loss distribution and…

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…

In this paper, we are interested in evaluating the resilience of financial portfolios under extreme economic conditions. Therefore, we use empirical measures to characterize the transmission process of macroeconomic shocks to risk…

This article reviews and presents various solved and open problems in the development, analysis, and control of epidemic models. We are interested in presenting a relatively concise report for new engineers looking to enter the field of…

Complex risk is a critical factor for both intelligent systems and risk management. In this paper, we consider a special class of risk statistics, named complex risk statistics. Our result provides a new approach for addressing complex…

This chapter reviews the purpose and use of models from the field of complex systems and, in particular, the implications of trying to use models to understand or make decisions within complex situations, such as policy makers usually face.…

We discuss models and data of crowd disasters, crime, terrorism, war and disease spreading to show that conventional recipes, such as deterrence strategies, are often not effective and sufficient to contain them. Many common approaches do…

The insufficient understanding of the credit network structure was recognized as a key factor for regulators' underestimation of the destructive systematic risk during the financial crisis that started in 2007. The existing credit network…

Social systems are characterized by the presence of group interactions and by the existence of both trust and distrust relations. Although there is a wide literature on signed social networks, where positive signs associated to the links…

The spread of ideas across a social network can be studied using complex contagion models, in which agents are activated by contact with multiple activated neighbors. The investigation of complex contagions can provide crucial insights into…

Common asset holding by financial institutions, namely portfolio overlap, is nowadays regarded as an important channel for financial contagion with the potential to trigger fire sales and thus severe losses at the systemic level. In this…