Parkinson's Law Quantified: Three Investigations on Bureaucratic Inefficiency

We formulate three famous, descriptive essays of C.N. Parkinson on bureaucratic inefficiency in a quantifiable and dynamical socio-physical framework. In the first model we show how the use of recent opinion formation models for small groups can be used to understand Parkinson's observation that decision making bodies such as cabinets or boards become highly inefficient once their size exceeds a critical 'Coefficient of Inefficiency', typically around 20. A second observation of Parkinson - which is sometimes referred to as Parkinson's Law - is that the growth of bureaucratic or administrative bodies usually goes hand in hand with a drastic decrease of its overall efficiency. In our second model we view a bureaucratic body as a system of a flow of workers, which enter, become promoted to various internal levels within the system over time, and leave the system after having served for a certain time. Promotion usually is associated with an increase of subordinates. Within the proposed model it becomes possible to work out the phase diagram under which conditions bureaucratic growth can be confined. In our last model we assign individual efficiency curves to workers throughout their life in administration, and compute the optimum time to send them to old age pension, in order to ensure a maximum of efficiency within the body - in Parkinson's words we compute the 'Pension Point'.Comment: 15 pages, 5 figure

Opinion Formation in Laggard Societies

We introduce a statistical physics model for opinion dynamics on random networks where agents adopt the opinion held by the majority of their direct neighbors only if the fraction of these neighbors exceeds a certain threshold, p_u. We find a transition from total final consensus to a mixed phase where opinions coexist amongst the agents. The relevant parameters are the relative sizes in the initial opinion distribution within the population and the connectivity of the underlying network. As the order parameter we define the asymptotic state of opinions. In the phase diagram we find regions of total consensus and a mixed phase. As the 'laggard parameter' p_u increases the regions of consensus shrink. In addition we introduce rewiring of the underlying network during the opinion formation process and discuss the resulting consequences in the phase diagram.Comment: 5 pages, eps fig

Statistical mechanics of scale-free networks at a critical point: Complexity without irreversibility?

Based on a rigorous extension of classical statistical mechanics to networks, we study a specific microscopic network Hamiltonian. The form of this Hamiltonian is derived from the assumption that individual nodes increase/decrease their utility by linking to nodes with a higher/lower degree than their own. We interpret utility as an equivalent to energy in physical systems and discuss the temperature dependence of the emerging networks. We observe the existence of a critical temperature $T_c$ where total energy (utility) and network-architecture undergo radical changes. Along this topological transition we obtain scale-free networks with complex hierarchical topology. In contrast to models for scale-free networks introduced so far, the scale-free nature emerges within equilibrium, with a clearly defined microcanonical ensemble and the principle of detailed balance strictly fulfilled. This provides clear evidence that 'complex' networks may arise without irreversibility. The results presented here should find a wide variety of applications in socio-economic statistical systems.Comment: 4 pages, 5 figure

Unified model for network dynamics exhibiting nonextensive statistics

We introduce a dynamical network model which unifies a number of network families which are individually known to exhibit $q$-exponential degree distributions. The present model dynamics incorporates static (non-growing) self-organizing networks, preferentially growing networks, and (preferentially) rewiring networks. Further, it exhibits a natural random graph limit. The proposed model generalizes network dynamics to rewiring and growth modes which depend on internal topology as well as on a metric imposed by the space they are embedded in. In all of the networks emerging from the presented model we find q-exponential degree distributions over a large parameter space. We comment on the parameter dependence of the corresponding entropic index q for the degree distributions, and on the behavior of the clustering coefficients and neighboring connectivity distributions.Comment: 11 pages 8 fig

Schumpeterian economic dynamics as a quantifiable minimum model of evolution

We propose a simple quantitative model of Schumpeterian economic dynamics. New goods and services are endogenously produced through combinations of existing goods. As soon as new goods enter the market they may compete against already existing goods, in other words new products can have destructive effects on existing goods. As a result of this competition mechanism existing goods may be driven out from the market - often causing cascades of secondary defects (Schumpeterian gales of destruction). The model leads to a generic dynamics characterized by phases of relative economic stability followed by phases of massive restructuring of markets - which could be interpreted as Schumpeterian business `cycles'. Model timeseries of product diversity and productivity reproduce several stylized facts of economics timeseries on long timescales such as GDP or business failures, including non-Gaussian fat tailed distributions, volatility clustering etc. The model is phrased in an open, non-equilibrium setup which can be understood as a self organized critical system. Its diversity dynamics can be understood by the time-varying topology of the active production networks.Comment: 21 pages, 11 figure

Unanimity Rule on networks

We introduce a model for innovation-, evolution- and opinion dynamics whose spreading is dictated by unanimity rules, i.e. a node will change its (binary) state only if all of its neighbours have the same corresponding state. It is shown that a transition takes place depending on the initial condition of the problem. In particular, a critical number of initially activated nodes is needed so that the whole system gets activated in the long-time limit. The influence of the degree distribution of the nodes is naturally taken into account. For simple network topologies we solve the model analytically, the cases of random, small-world and scale-free are studied in detail.Comment: 7 pages 4 fig

To bail-out or to bail-in? Answers from an agent-based model

Since the beginning of the 2008 financial crisis almost half a trillion euros have been spent to financially assist EU member states in taxpayer-funded bail-outs. These crisis resolutions are often accompanied by austerity programs causing political and social friction on both domestic and international levels. The question of how to resolve failing financial institutions, and how this depends on economic preconditions, is therefore a pressing and controversial issue of vast political importance. In this work we employ an agent-based model to study the economic and financial ramifications of three highly relevant crisis resolution mechanisms. To establish the validity of the model we show that it reproduces a series of key stylized facts of the financial and real economy. The distressed institution can either be closed via a purchase & assumption transaction, it can be bailed-out using taxpayer money, or it may be bailed-in in a debt-to-equity conversion. We find that for an economy characterized by low unemployment and high productivity the optimal crisis resolution with respect to financial stability and economic productivity is to close the distressed institution. For economies in recession with high unemployment the bail-in tool provides the most efficient crisis resolution mechanism. Under no circumstances do taxpayer-funded bail-out schemes outperform bail-ins with private sector involvement

To what extent homophily and influencer networks explain song popularity

Forecasting the popularity of new songs has become a standard practice in the music industry and provides a comparative advantage for those that do it well. Considerable efforts were put into machine learning prediction models for that purpose. It is known that in these models, relevant predictive parameters include intrinsic lyrical and acoustic characteristics, extrinsic factors (e.g., publisher influence and support), and the previous popularity of the artists. Much less attention was given to the social components of the spreading of song popularity. Recently, evidence for musical homophily - the tendency that people who are socially linked also share musical tastes - was reported. Here we determine how musical homophily can be used to predict song popularity. The study is based on an extensive dataset from the last.fm online music platform from which we can extract social links between listeners and their listening patterns. To quantify the importance of networks in the spreading of songs that eventually determines their popularity, we use musical homophily to design a predictive influence parameter and show that its inclusion in state-of-the-art machine learning models enhances predictions of song popularity. The influence parameter improves the prediction precision (TP/(TP+FN)) by about 50% from 0.14 to 0.21, indicating that the social component in the spreading of music plays at least as significant a role as the artist's popularity or the impact of the genre.Comment: 7 pages, 3 figure

Scale-freeness for networks as a degenerate ground state: A Hamiltonian formulation

The origin of scale-free degree distributions in the context of networks is addressed through an analogous non-network model in which the node degree corresponds to the number of balls in a box and the rewiring of links to balls moving between the boxes. A statistical mechanical formulation is presented and the corresponding Hamiltonian is derived. The energy, the entropy, as well as the degree distribution and its fluctuations are investigated at various temperatures. The scale-free distribution is shown to correspond to the degenerate ground state, which has small fluctuations in the degree distribution and yet a large entropy. We suggest an implication of our results from the viewpoint of the stability in evolution of networks.Comment: 7 pages, 3 figures. To appear in Europhysics lette

Statistical detection of systematic election irregularities

Democratic societies are built around the principle of free and fair elections, that each citizen's vote should count equal. National elections can be regarded as large-scale social experiments, where people are grouped into usually large numbers of electoral districts and vote according to their preferences. The large number of samples implies certain statistical consequences for the polling results which can be used to identify election irregularities. Using a suitable data collapse, we find that vote distributions of elections with alleged fraud show a kurtosis of hundred times more than normal elections on certain levels of data aggregation. As an example we show that reported irregularities in recent Russian elections are indeed well explained by systematic ballot stuffing and develop a parametric model quantifying to which extent fraudulent mechanisms are present. We show that if specific statistical properties are present in an election, the results do not represent the will of the people. We formulate a parametric test detecting these statistical properties in election results. Remarkably, this technique produces similar outcomes irrespective of the data resolution and thus allows for cross-country comparisons.Comment: For data see also http://www.complex-systems.meduniwien.ac.at/elections/election.htm