Dynamics, robustness and fragility of trust

Trust is often conveyed through delegation, or through recommendation. This makes the trust authorities, who process and publish trust recommendations, into an attractive target for attacks and spoofing. In some recent empiric studies, this was shown to lead to a remarkable phenomenon of *adverse selection*: a greater percentage of unreliable or malicious web merchants were found among those with certain types of trust certificates, then among those without. While such findings can be attributed to a lack of diligence in trust authorities, or even to conflicts of interest, our analysis of trust dynamics suggests that public trust networks would probably remain vulnerable even if trust authorities were perfectly diligent. The reason is that the process of trust building, if trust is not breached too often, naturally leads to power-law distributions: the rich get richer, the trusted attract more trust. The evolutionary processes with such distributions, ubiquitous in nature, are known to be robust with respect to random failures, but vulnerable to adaptive attacks. We recommend some ways to decrease the vulnerability of trust building, and suggest some ideas for exploration.Comment: 17 pages; simplified the statement and the proof of the main theorem; FAST 200

The fragility of decentralised trustless socio-technical systems

The blockchain technology promises to transform finance, money and even governments. However, analyses of blockchain applicability and robustness typically focus on isolated systems whose actors contribute mainly by running the consensus algorithm. Here, we highlight the importance of considering trustless platforms within the broader ecosystem that includes social and communication networks. As an example, we analyse the flash-crash observed on 21st June 2017 in the Ethereum platform and show that a major phenomenon of social coordination led to a catastrophic cascade of events across several interconnected systems. We propose the concept of “emergent centralisation” to describe situations where a single system becomes critically important for the functioning of the whole ecosystem, and argue that such situations are likely to become more and more frequent in interconnected socio-technical systems. We anticipate that the systemic approach we propose will have implications for future assessments of trustless systems and call for the attention of policy-makers on the fragility of our interconnected and rapidly changing world

Contrasting Views of Complexity and Their Implications For Network-Centric Infrastructures

There exists a widely recognized need to better understand and manage complex “systems of systems,” ranging from biology, ecology, and medicine to network-centric technologies. This is motivating the search for universal laws of highly evolved systems and driving demand for new mathematics and methods that are consistent, integrative, and predictive. However, the theoretical frameworks available today are not merely fragmented but sometimes contradictory and incompatible. We argue that complexity arises in highly evolved biological and technological systems primarily to provide mechanisms to create robustness. However, this complexity itself can be a source of new fragility, leading to “robust yet fragile” tradeoffs in system design. We focus on the role of robustness and architecture in networked infrastructures, and we highlight recent advances in the theory of distributed control driven by network technologies. This view of complexity in highly organized technological and biological systems is fundamentally different from the dominant perspective in the mainstream sciences, which downplays function, constraints, and tradeoffs, and tends to minimize the role of organization and design

a review of the instruments of the EU, Germany, France, and Italy

This paper explores how the idea of resilience has made its way into the external action of the European Union (EU) and selected member states (Germany, France and Italy) as a means to address areas of limited statehood and contested orders. It examines the debates informing the development of the EU’s external action and current concerns in economic, political, and migration instruments. The main findings are that the EU’s economic and political instruments have become gradually dominated by resilience framings, with an emphasis on multilateralism, adaptation, and long-term and bottom-up responses. Resilience also increasingly drives the humanitarian assistance and development cooperation policies in Germany and to a lesser extent France, which have gradually moved away from top-down administrative and centralized models of governance. The EU and member states like Italy, however, have been more reluctant to foster resilience to address migration issues. Instead, they have prevented flows of irregular migrants into Europe by means of containment strategies such as improving border management, policing, and surveillance and combating smuggling networks

Business fluctuations in a behavioral switching model: Gridlock effects and credit crunch phenomena in financial networks

In this paper we characterize the evolution over time of a credit network in the most general terms as a system of interacting banks and firms operating in a three-sector economy with goods, credit and interbank market. Credit connections change over time via an evolving fitness measure depending from lenders’ supply of liquidity and borrowers’ demand of credit. Moreover, an endogenous learning mechanism allows agents to switch between a loyal or a shopping-around strategy according to their degree of satisfaction. The crucial question we investigate is how financial bubbles and credit-crunch phenomena emerge from the implemented mechanism

Robustness - a challenge also for the 21st century: A review of robustness phenomena in technical, biological and social systems as well as robust approaches in engineering, computer science, operations research and decision aiding

Notions on robustness exist in many facets. They come from different disciplines and reflect different worldviews. Consequently, they contradict each other very often, which makes the term less applicable in a general context. Robustness approaches are often limited to specific problems for which they have been developed. This means, notions and definitions might reveal to be wrong if put into another domain of validity, i.e. context. A definition might be correct in a specific context but need not hold in another. Therefore, in order to be able to speak of robustness we need to specify the domain of validity, i.e. system, property and uncertainty of interest. As proofed by Ho et al. in an optimization context with finite and discrete domains, without prior knowledge about the problem there exists no solution what so ever which is more robust than any other. Similar to the results of the No Free Lunch Theorems of Optimization (NLFTs) we have to exploit the problem structure in order to make a solution more robust. This optimization problem is directly linked to a robustness/fragility tradeoff which has been observed in many contexts, e.g. 'robust, yet fragile' property of HOT (Highly Optimized Tolerance) systems. Another issue is that robustness is tightly bounded to other phenomena like complexity for which themselves exist no clear definition or theoretical framework. Consequently, this review rather tries to find common aspects within many different approaches and phenomena than to build a general theorem for robustness, which anyhow might not exist because complex phenomena often need to be described from a pluralistic view to address as many aspects of a phenomenon as possible. First, many different robustness problems have been reviewed from many different disciplines. Second, different common aspects will be discussed, in particular the relationship of functional and structural properties. This paper argues that robustness phenomena are also a challenge for the 21st century. It is a useful quality of a model or system in terms of the 'maintenance of some desired system characteristics despite fluctuations in the behaviour of its component parts or its environment' (s. [Carlson and Doyle, 2002], p. 2). We define robustness phenomena as solution with balanced tradeoffs and robust design principles and robustness measures as means to balance tradeoffs. --