Slightly generalized Generalized Contagion: Unifying simple models of biological and social spreading

We motivate and explore the basic features of generalized contagion, a model mechanism that unifies fundamental models of biological and social contagion. Generalized contagion builds on the elementary observation that spreading and contagion of all kinds involve some form of system memory. We discuss the three main classes of systems that generalized contagion affords, resembling: simple biological contagion; critical mass contagion of social phenomena; and an intermediate, and explosive, vanishing critical mass contagion. We also present a simple explanation of the global spreading condition in the context of a small seed of infected individuals.Comment: 8 pages, 5 figures; chapter to appear in "Spreading Dynamics in Social Systems"; Eds. Sune Lehmann and Yong-Yeol Ahn, Springer Natur

A simple person's approach to understanding the contagion condition for spreading processes on generalized random networks

We present derivations of the contagion condition for a range of spreading mechanisms on families of generalized random networks and bipartite random networks. We show how the contagion condition can be broken into three elements, two structural in nature, and the third a meshing of the contagion process and the network. The contagion conditions we obtain reflect the spreading dynamics in a clear, interpretable way. For threshold contagion, we discuss results for all-to-all and random network versions of the model, and draw connections between them.Comment: 10 pages, 9 figures; chapter to appear in "Spreading Dynamics in Social Systems"; Eds. Sune Lehmann and Yong-Yeol Ahn, Springer Natur

A mixed-game agent-based model of financial contagion

Over the past two decades, financial market crises with similar features have occurred in different regions of the world. Unstable cross-market linkages during financial crises are referred to as financial contagion. We simulate the transmission of financial crises in the context of a model of market participants adopting various strategies; this allows testing for financial contagion under alternative scenarios. Using a minority game approach, we develop an agent-based multinational model and investigate the reasons for contagion. Although contagion has been extensively investigated in the financial literature, it has not been studied yet through computational intelligence techniques. Our simulations shed light on parameter values and characteristics which can be exploited to detect contagion at an earlier stage, hence recognising financial crises with the potential to destabilise cross-market linkages. In the real world, such information would be extremely valuable to develop appropriate risk management strategies

Measuring Financial Market Contagion Using Dually-Traded Stocks of Asian Firms

This paper investigates stock market contagion between U.S. and Asian markets. To distinguish between contagion and fundamentals-based stock price comovement, we use NYSE-traded stocks issued by Asian firms. Among the results, first we find that the empirical results show significant bilateral contagion effects in returns and return volatility. Second, contagion effects from U.S. market to Asian markets are stronger than in the reverse direction, indicating that the U.S. market plays a major role in the transmission of information to foreign markets. Third, the intensity of contagion was significantly greater during the Asian financial crisis than after the crisis.Asian financial crisis, ADRs, EGARCH, Contagion

Some critics to the contagion correlation test

The term contagion is generally used to refer to the spread3 of market shocks from one country to another. However, identifying what is meant by contagion and its consequences has become in recent years a literature in itself4, given the importance of such consequences on economies all over the world. Despite the lack of theoretical consensus, some authors try to measure contagion through the use of correlation tests. The aim of my work is to raise a technical and conceptual critique concerning these models. To support my concerns I provide a broad vision and background of contagion literature and an insight in the particular field of contagion correlation test. The work is organized in four parts. Firstly, an overview of definitional issues concerning contagion, as presented in the literature, is explained together with the different crisis transmission channels that authors have identified. Secondly, a detailed description of the contagion correlation test –as the most common means to search for contagion—is presented, giving a full overview of the models used in the literature. Thirdly, I will express my concerns about the test and the models of the previous section. Finally, some conclusions are stated.

Speculative Behaviour, Debt Default and Contagion: An Explanation of the Latin American Crisis 2001-2002

This paper provides a model incorporating strategic speculative behaviour into a framework of debt default and contagion. A basic model of contagion shows how economies which appear fundamentally sound, can fail to meet foreign obligations when there are inter-linkages with a defaulting country. Introducing speculators into the framework increases the incidence of debt default and contagion. However, when these speculators view the economy with a degree of uncertainty, the likelihood of default and contagion is even greater. SpeculatorsÂ’ perceptions over the state of the economy are therefore paramount when estimating the impact of a crisis on a region.Currency Crises, Contagion, Common Knowledge.

Phase transitions in contagion processes mediated by recurrent mobility patterns

Human mobility and activity patterns mediate contagion on many levels, including the spatial spread of infectious diseases, diffusion of rumors, and emergence of consensus. These patterns however are often dominated by specific locations and recurrent flows and poorly modeled by the random diffusive dynamics generally used to study them. Here we develop a theoretical framework to analyze contagion within a network of locations where individuals recall their geographic origins. We find a phase transition between a regime in which the contagion affects a large fraction of the system and one in which only a small fraction is affected. This transition cannot be uncovered by continuous deterministic models due to the stochastic features of the contagion process and defines an invasion threshold that depends on mobility parameters, providing guidance for controlling contagion spread by constraining mobility processes. We recover the threshold behavior by analyzing diffusion processes mediated by real human commuting data.Comment: 20 pages of Main Text including 4 figures, 7 pages of Supplementary Information; Nature Physics (2011

Coordination Failure and Financial Contagion

This paper explores a unique equilibrium model of ''informational'' financial contagion. Extending the global game model of Morris and Shin (1999), I show that the failure of a single firm can trigger a chain of failures merely by affecting the behavior of investors. In contrast to the existing multiple equilibria models of financial and banking panics, there is no indeterminacy in the present model. Thus, it provides a clear framework to assess the consequences of contagion and yields some important and hitherto unnoticed insights. Most importantly, if contagion is compared to an appropriate benchmark, its impact can be both positive or negative, which contrasts sharply with the traditional view of contagion. Moreover, contagion increases the correlation between firms, but the effect on the unconditional probability of failure is exactly zerofinancial contagion; systemic risk; financial crises; global games; unique equilibrium

Eye movements may cause motor contagion effects

When a person executes a movement, the movement is more errorful while observing another person’s actions that are incongruent rather than congruent with the executed action. This effect is known as “motor contagion”. Accounts of this effect are often grounded in simulation mechanisms: increased movement error emerges because the motor codes associated with observed actions compete with motor codes of the goal action. It is also possible, however, that the increased movement error is linked to eye movements that are executed simultaneously with the hand movement because oculomotor and manual-motor systems are highly interconnected. In the present study, participants performed a motor contagion task in which they executed horizontal arm movements while observing a model making either vertical (incongruent) or horizontal (congruent) movements under three conditions: no instruction, maintain central fixation, or track the model’s hand with the eyes. A significant motor contagion-like effect was only found in the ‘track’ condition. Thus, ‘motor contagion’ in the present task may be an artifact of simultaneously executed incongruent eye movements. These data are discussed in the context of stimulation and associative learning theories, and raise eye movements as a critical methodological consideration for future work on motor contagion