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This paper develops an analytical model of contagion in financial networks with arbitrary structure. We explore how the probability and potential impact of contagion is influenced by aggregate and idiosyncratic shocks, changes in network structure, and asset market liquidity. Our findings suggest that financial systems exhibit a robust-yet ...Fig. 5, Fig. 6 show the effects of changing the network structure on systemic risk and the number of defaulting banks with and without the non-central clearing, respectively. The network structure can be changed by changing the network density parameter to set the network density parameters a ∈ 0. 1, 0. 9.The greater the network …Contagion definition, the communication of disease by direct or indirect contact. See more.Contagion Dynamics in Complex Networks. Lucas Böttcher24 . Chapter. First Online: 20 April 2022. 387 Accesses. Part of the Emergence, Complexity and …Abstract. By introducing the dynamic change model of external investment price, this study constructs a dynamic risk contagion model of inter-firm credit guarantee network, and studies the dynamic ...Risk-sharing and contagion in networks Antonio Cabrales University College London Piero Gottardi European University Institute Fernando Vega-Redondo Universit a Bocconi April 9, 2014 Abstract We investigate the trade-o between the risk-sharing gains enjoyed by more intercon-nected rms and the costs resulting from an increased risk exposure.Distinguishing influence-based contagion from homophily-driven diffusion in dynamic networks. Proceedings of the National Academy of Sciences , 106 (51) , 21544 – 21549 . CrossRef Google Scholar PubMedAbstract. We study how opinion leadership and social contagion within social networks affect the adoption of a new product. In contrast to earlier studies, we find evidence of contagion operating over network ties, even after controlling for marketing effort and arbitrary systemwide changes. More importantly, we also find that the amount of ...First, moral contagion may be an antecedent process feeding into polarization or the increased distance among members of different political ideologies in online social networks (Barberá, Jost, Nagler, Tucker, & Bonneau, 2015; Brady et al., 2017) that people across the political spectrum have argued is a significant threat to civil discourse ...Whilst sparser networks limit the ability of shocks to spread, reducing contagion, they also reduce the risk sharing capacity of the market and so increase the risk of individual banks failing. The model presented in the next section will examine this interaction and the behavior of the financial system as a whole.Contagion is defined as a significant increase in cross-market co-movement of asset returns (Dungey et al., Citation 2004; Forbes & Rigobon, Citation 2002). According to Forbes and Rigobon (Citation 2002) and Celik (Citation 2012), the co-movements between financial markets may arise from the contagion or interdependence among financial markets ...Contagion effects, also known as peer effects or social influence process, have become more and more central to social science, especially with the availability of longitudinal social network data. However, contagion effects are usually difficult to identify, as they are often entangled with other factors, such as homophily in the selection ...As discussed in Section 2, contagion occurs through social interactions, and thus the process of contagion would use a social network as a substrate. In parallel, there could be an exploration process with reinforcement—akin to those introduced in Section 3—that takes place over a different network of relations/similarities between items.Complex contagions that require more than two contacts to "infected" sources can be described with threshold rules. In the following description of such general contagion dynamics, the components of a network are regarded as either active or inactive and change their state according to three fundamental processes: (i) an active node becomes spontaneously inactive in a time interval ...Therefore, in the dynamic risk contagion model of inter-firm credit guarantee network constructed, the contagion of assets losses and bankruptcy risk between firms are more serious in this study. More importantly, it can reflect the actual situation of risk contagion between firms through credit guarantee network. 3.tion is how network structure interacts with other potential sources of contagion. In the run-up to the crisis, leverage levels increased and capital buffers at some banks were extremely thin. Large financial institutions had increased their reliance on short-term Contagion in Financial Networks † Paul Glasserman and H. Peyton Young*Complex contagions that require more than two contacts to "infected" sources can be described with threshold rules. In the following description of such general contagion dynamics, the components of a network are regarded as either active or inactive and change their state according to three fundamental processes: (i) an active node becomes spontaneously inactive in a time interval ...

Downloadable! This paper develops an analytical model of contagion in financial networks with arbitrary structure. We explore how the probability and potential impact of contagion is influenced by aggregate and idiosyncratic shocks, changes in network structure, and asset market liquidity. Our findings suggest that financial systems exhibit a …To this end, we suggest the possibility of designing an in-silico experiment in which homophily is arbitrarily tuned by artificially affecting the social network structure, for example by introducing an ad-hoc community structure [53–55], and contagion is thus analyzed in light of the controlled homophily mechanism.The network is particularly vulnerable to contagion when the originating node is large, highly leveraged, and, crucially, has a relatively high proportion of its obligations held by other financial institutions as opposed to the nonfinancial sector, what we will call high financial connectivity.To study the transition from simple to complex contagion in the LFC, we consider networks of N + 1 = 240 agents. This is significantly smaller than for the LTM, but the ...Jan 28, 2016 · Explosive Contagion in Networks | Scientific Reports. The spread of social phenomena such as behaviors, ideas or products is an ubiquitous but remarkably complex phenomenon. A successful avenue...

heterogeneous networks are found to be more resilient to contagion. The impact of connectivity is more controversial: in well-capitalized networks, increasing con-nectivity improves the resilience to contagion when the initial level of connectivity is high, but increases contagion when the initial level of connectivity is low. InWe further demonstrate how Bayesian network theory can be applied to detect contagion channels within the financial network, to measure the systemic importance of selected entities on others, and ...By constructing trade–investment networks and modeling the contagion of systemic risk in trade and investment channels within different countries, we design three immune strategies, namely, Random Immune, Target Immune, and Neighbor Immune, and compare the inhibitory effect of these strategies on the shock contagion of multilayer ……

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