Systemic Risk in the Financial System: Insights From Network Science

Analyzes systemic risk from the perspective of network structure and the connectivity links between actors. Explores how the markets' lack of robustness, the pattern of network links, and the lack of diversity in networks contributed to the crisis

Long ties accelerate noisy threshold-based contagions

Network structure can affect when and how widely new ideas, products, and behaviors are adopted. In widely-used models of biological contagion, interventions that randomly rewire edges (generally making them "longer") accelerate spread. However, there are other models relevant to social contagion, such as those motivated by myopic best-response in games with strategic complements, in which an individual's behavior is described by a threshold number of adopting neighbors above which adoption occurs (i.e., complex contagions). Recent work has argued that highly clustered, rather than random, networks facilitate spread of these complex contagions. Here we show that minor modifications to this model, which make it more realistic, reverse this result: we allow very rare below-threshold adoption, i.e., rarely adoption occurs when there is only one adopting neighbor. To model the trade-off between long and short edges we consider networks that are the union of cycle-power-$k$ graphs and random graphs on $n$ nodes. Allowing adoptions below threshold to occur with order $1/\sqrt{n}$ probability along some "short" cycle edges is enough to ensure that random rewiring accelerates spread. Simulations illustrate the robustness of these results to other commonly-posited models for noisy best-response behavior. Hypothetical interventions that randomly rewire existing edges or add random edges (versus adding "short", triad-closing edges) in hundreds of empirical social networks reduce time to spread. This revised conclusion suggests that those wanting to increase spread should induce formation of long ties, rather than triad-closing ties. More generally, this highlights the importance of noise in game-theoretic analyses of behavior

The Lifecycle and Cascade of WeChat Social Messaging Groups

Social instant messaging services are emerging as a transformative form with which people connect, communicate with friends in their daily life - they catalyze the formation of social groups, and they bring people stronger sense of community and connection. However, research community still knows little about the formation and evolution of groups in the context of social messaging - their lifecycles, the change in their underlying structures over time, and the diffusion processes by which they develop new members. In this paper, we analyze the daily usage logs from WeChat group messaging platform - the largest standalone messaging communication service in China - with the goal of understanding the processes by which social messaging groups come together, grow new members, and evolve over time. Specifically, we discover a strong dichotomy among groups in terms of their lifecycle, and develop a separability model by taking into account a broad range of group-level features, showing that long-term and short-term groups are inherently distinct. We also found that the lifecycle of messaging groups is largely dependent on their social roles and functions in users' daily social experiences and specific purposes. Given the strong separability between the long-term and short-term groups, we further address the problem concerning the early prediction of successful communities. In addition to modeling the growth and evolution from group-level perspective, we investigate the individual-level attributes of group members and study the diffusion process by which groups gain new members. By considering members' historical engagement behavior as well as the local social network structure that they embedded in, we develop a membership cascade model and demonstrate the effectiveness by achieving AUC of 95.31% in predicting inviter, and an AUC of 98.66% in predicting invitee.Comment: 10 pages, 8 figures, to appear in proceedings of the 25th International World Wide Web Conference (WWW 2016

Efficient detection of contagious outbreaks in massive metropolitan encounter networks

Physical contact remains difficult to trace in large metropolitan networks, though it is a key vehicle for the transmission of contagious outbreaks. Co-presence encounters during daily transit use provide us with a city-scale time-resolved physical contact network, consisting of 1 billion contacts among 3 million transit users. Here, we study the advantage that knowledge of such co-presence structures may provide for early detection of contagious outbreaks. We first examine the "friend sensor" scheme --- a simple, but universal strategy requiring only local information --- and demonstrate that it provides significant early detection of simulated outbreaks. Taking advantage of the full network structure, we then identify advanced "global sensor sets", obtaining substantial early warning times savings over the friends sensor scheme. Individuals with highest number of encounters are the most efficient sensors, with performance comparable to individuals with the highest travel frequency, exploratory behavior and structural centrality. An efficiency balance emerges when testing the dependency on sensor size and evaluating sensor reliability; we find that substantial and reliable lead-time could be attained by monitoring only 0.01% of the population with the highest degree.Comment: 4 figure