Core-periphery structure in directed networks

Empirical networks often exhibit different meso-scale structures, such as community and core–periphery structures. Core–periphery structure typically consists of a well-connected core and a periphery that is well connected to the core but sparsely connected internally. Most core–periphery studies focus on undirected networks. We propose a generalization of core–periphery structure to directed networks. Our approach yields a family of core–periphery block model formulations in which, contrary to many existing approaches, core and periphery sets are edge-direction dependent. We focus on a particular structure consisting of two core sets and two periphery sets, which we motivate empirically. We propose two measures to assess the statistical significance and quality of our novel structure in empirical data, where one often has no ground truth. To detect core–periphery structure in directed networks, we propose three methods adapted from two approaches in the literature, each with a different trade-off between computational complexity and accuracy. We assess the methods on benchmark networks where our methods match or outperform standard methods from the literature, with a likelihood approach achieving the highest accuracy. Applying our methods to three empirical networks—faculty hiring, a world trade dataset and political blogs—illustrates that our proposed structure provides novel insights in empirical networks

Reconstructing Mesoscale Network Structures

When facing the problem of reconstructing complex mesoscale network structures, it is generally believed that models encoding the nodes organization into modules must be employed. The present paper focuses on two block structures that characterize the empirical mesoscale organization of many real-world networks, i.e., the bow-tie and the core-periphery ones, with the aim of quantifying the minimal amount of topological information that needs to be enforced in order to reproduce the topological details of the former. Our analysis shows that constraining the network degree sequences is often enough to reproduce such structures, as confirmed by model selection criteria as AIC or BIC. As a byproduct, our paper enriches the toolbox for the analysis of bipartite networks, still far from being complete: both the bow-tie and the core-periphery structure, in fact, partition the networks into asymmetric blocks characterized by binary, directed connections, thus calling for the extension of a recently proposed method to randomize undirected, bipartite networks to the directed case

Graphlet-based Characterization of Directed Networks

We are flooded with large-scale, dynamic, directed, networked data. Analyses requiring exact comparisons between networks are computationally intractable, so new methodologies are sought. To analyse directed networks, we extend graphlets (small induced sub-graphs) and their degrees to directed data. Using these directed graphlets, we generalise state-of-the-art network distance measures (RGF, GDDA and GCD) to directed networks and show their superiority for comparing directed networks. Also, we extend the canonical correlation analysis framework that enables uncovering the relationships between the wiring patterns around nodes in a directed network and their expert annotations. On directed World Trade Networks (WTNs), our methodology allows uncovering the core-broker-periphery structure of the WTN, predicting the economic attributes of a country, such as its gross domestic product, from its wiring patterns in the WTN for up-to ten years in the future. It does so by enabling us to track the dynamics of a country’s positioning in the WTN over years. On directed metabolic networks, our framework yields insights into preservation of enzyme function from the network wiring patterns rather than from sequence data. Overall, our methodology enables advanced analyses of directed networked data from any area of science, allowing domain-specific interpretation of a directed network’s topology

Structural efficiency of percolation landscapes in flow networks

Complex networks characterized by global transport processes rely on the presence of directed paths from input to output nodes and edges, which organize in characteristic linked components. The analysis of such network-spanning structures in the framework of percolation theory, and in particular the key role of edge interfaces bridging the communication between core and periphery, allow us to shed light on the structural properties of real and theoretical flow networks, and to define criteria and quantities to characterize their efficiency at the interplay between structure and functionality. In particular, it is possible to assess that an optimal flow network should look like a "hairy ball", so to minimize bottleneck effects and the sensitivity to failures. Moreover, the thorough analysis of two real networks, the Internet customer-provider set of relationships at the autonomous system level and the nervous system of the worm Caenorhabditis elegans --that have been shaped by very different dynamics and in very different time-scales--, reveals that whereas biological evolution has selected a structure close to the optimal layout, market competition does not necessarily tend toward the most customer efficient architecture.Comment: 8 pages, 5 figure

Detecting Core-Periphery Structures by Surprise

Detecting the presence of mesoscale structures in complex networks is of primary importance. This is especially true for financial networks, whose structural organization deeply affects their resilience to events like default cascades, shocks propagation, etc. Several methods have been proposed, so far, to detect communities, i.e. groups of nodes whose connectivity is significantly large. Communities, however do not represent the only kind of mesoscale structures characterizing real-world networks: other examples are provided by bow-tie structures, core-periphery structures and bipartite structures. Here we propose a novel method to detect statistically-signifcant bimodular structures, i.e. either bipartite or core-periphery ones. It is based on a modification of the surprise, recently proposed for detecting communities. Our variant allows for bimodular nodes partitions to be revealed, by letting links to be placed either 1) within the core part and between the core and the periphery parts or 2) just between the (empty) layers of a bipartite network. From a technical point of view, this is achieved by employing a multinomial hypergeometric distribution instead of the traditional (binomial) hypergeometric one; as in the latter case, this allows a p-value to be assigned to any given (bi)partition of the nodes. To illustrate the performance of our method, we report the results of its application to several real-world networks, including social, economic and financial ones.Comment: 11 pages, 10 figures. Python code freely available at https://github.com/jeroenvldj/bimodular_surpris

The organization of the interbank network and how ECB unconventional measures affected the e-MID overnight market

The topological properties of interbank networks have been discussed widely in the literature mainly because of their relevance for systemic risk. Here we propose to use the Stochastic Block Model to investigate and perform a model selection among several possible two block organizations of the network: these include bipartite, core-periphery, and modular structures. We apply our method to the e-MID interbank market in the period 2010-2014 and we show that in normal conditions the most likely network organization is a bipartite structure. In exceptional conditions, such as after LTRO, one of the most important unconventional measures by ECB at the beginning of 2012, the most likely structure becomes a random one and only in 2014 the e-MID market went back to a normal bipartite organization. By investigating the strategy of individual banks, we explore possible explanations and we show that the disappearance of many lending banks and the strategy switch of a very small set of banks from borrower to lender is likely at the origin of this structural change.Comment: 33 pages, 5 figure

Early-warning signals of topological collapse in interbank networks

The financial crisis clearly illustrated the importance of characterizing the level of 'systemic' risk associated with an entire credit network, rather than with single institutions. However, the interplay between financial distress and topological changes is still poorly understood. Here we analyze the quarterly interbank exposures among Dutch banks over the period 1998-2008, ending with the crisis. After controlling for the link density, many topological properties display an abrupt change in 2008, providing a clear - but unpredictable - signature of the crisis. By contrast, if the heterogeneity of banks' connectivity is controlled for, the same properties show a gradual transition to the crisis, starting in 2005 and preceded by an even earlier period during which anomalous debt loops could have led to the underestimation of counter-party risk. These early-warning signals are undetectable if the network is reconstructed from partial bank-specific data, as routinely done. We discuss important implications for bank regulatory policies.Comment: 28 pages, 23 figures, 1 tabl