Bootstrapping topology and systemic risk of complex network using the fitness model

The control and risk assessment in complex information systems require to take into account extremes arising from nodes with large node degrees. Various sampling techniques like a Page Rank random walk, a Metropolis-Hastings Markov chain and others serve to collect information about the nodes. The paper contributes to the comparison of sampling techniques in complex networks by means of the first hitting time, that is the minimal time required to reach a large node. Both the ...

A growing body of studies on systemic risk in financial markets has emphasized the key importance of taking into consideration the complex interconnections among financial institutions. Much effort has been put in modeling the contagion dynamics of financial shocks, and to assess the resilience of specific financial markets - either using real network data, reconstruction techniques or simple toy networks. Here we address the more general problem of how shock propagation dyna...

Complex networks, modeled as large graphs, received much attention during these last years. However, data on such networks is only available through intricate measurement procedures. Until recently, most studies assumed that these procedures eventually lead to samples large enough to be representative of the whole, at least concerning some key properties. This has crucial impact on network modeling and simulation, which rely on these properties. Recent contributions proved ...

In recent years, many network perturbation techniques, such as topological perturbations and service perturbations, were employed to study and improve the robustness of complex networks. However, there is no general way to evaluate the network robustness. In this paper, we propose a new global measure for a network, the reconstructability coefficient {\theta}, defined as the maximum number of eigenvalues that can be removed, subject to the condition that the adjacency matrix ...

Complex networks obtained from the real-world networks are often characterized by incompleteness and noise, consequences of limited sampling as well as artifacts in the acquisition process. Because the characterization, analysis and modeling of complex systems underlain by complex networks are critically affected by the quality of the respective initial structures, it becomes imperative to devise methodologies for identifying and quantifying the effect of such sampling proble...

Here we provide a detailed analysis, along with some extensions and additonal investigations, of a recently proposed self-organised model for the evolution of complex networks. Vertices of the network are characterised by a fitness variable evolving through an extremal dynamics process, as in the Bak-Sneppen model representing a prototype of Self-Organized Criticality. The network topology is in turn shaped by the fitness variable itself, as in the fitness network model. The ...

Link prediction in complex networks has attracted increasing attention from both physical and computer science communities. The algorithms can be used to extract missing information, identify spurious interactions, evaluate network evolving mechanisms, and so on. This article summaries recent progress about link prediction algorithms, emphasizing on the contributions from physical perspectives and approaches, such as the random-walk-based methods and the maximum likelihood me...

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 attention has been paid to the understanding of the mechanisms that can lead to a breakdown of this network. This can happen when the existing financial links turn from being a means of risk diversification to channels for the propagation of r...

The aim of this paper is to quantify and manage systemic risk caused by default contagion in the interbank market. We model the market as a random directed network, where the vertices represent financial institutions and the weighted edges monetary exposures between them. Our model captures the strong degree of heterogeneity observed in empirical data and the parameters can easily be fitted to real data sets. One of our main results allows us to determine the impact of local ...

It is generally accepted that neighboring nodes in financial networks are negatively assorted with respect to the correlation between their degrees. This feature would play an important 'damping' role in the market during downturns (periods of distress) since this connectivity pattern between firms lowers the chances of auto-amplifying (the propagation of) distress. In this paper we explore a trade-network of industrial firms where the nodes are suppliers or buyers, and the l...