Essays on financial networks, systemic risk and policy

This essay consists of three chapters. Chapter one extends Allen and Gale’s (2000) model to a core-periphery network structure. We identify that the financial contagion in core-periphery structure is different to Allen and Gale (2000) in two aspects. Firstly, the shocks to the periphery bank and to the core bank have different contagion processes. Secondly, contagion not only depends on the amount of claims a bank has on a failed bank, but also on the number of links the failed neighbour has. Chapter two studies the policy effect on financial network formation when the government has time-inconsistency problem on bailing out systemically important bank. We show that if interbank deposits are guaranteed, the equilibrium network structure is different from the one under market discipline. We show that under market discipline individual banks can collectively increase the component size using interbank intermediation in order to increases the severity of systemic risk and hence trigger the bailout. If interbank intermediation is costly the equilibrium network has core-periphery structure. Chapter three follows Acharya and Yorulmazer’s (2007) study of the "too many to fail" problem in a two-bank model. They argue that in order to reduce the social losses, the financial regulator finds it ex post optimal to bail out every troubled bank if they fail together, because the acquisition of liquidated assets by other investors result in a high misallocation cost. In contrast to their paper, we argue that there is no "too many to fail" bailout, unless banking capital is costly and market price sensitive. We argue that market price sensitive capital can induce banks herding and high social cost

The neural basis of responsibility attribution in decision-making

Social responsibility links personal behavior with societal expectations and plays a key role in affecting an agent's emotional state following a decision. However, the neural basis of responsibility attribution remains unclear. In two previous event-related brain potential (ERP) studies we found that personal responsibility modulated outcome evaluation in gambling tasks. Here we conducted a functional magnetic resonance imaging (fMRI) study to identify particular brain regions that mediate responsibility attribution. In a context involving team cooperation, participants completed a task with their teammates and on each trial received feedback about team success and individual success sequentially. We found that brain activity differed between conditions involving team success vs. team failure. Further, different brain regions were associated with reinforcement of behavior by social praise vs. monetary reward. Specifically, right temporoparietal junction (RTPJ) was associated with social pride whereas dorsal striatum and dorsal anterior cingulate cortex (ACC) were related to reinforcement of behaviors leading to personal gain. The present study provides evidence that the RTPJ is an important region for determining whether self-generated behaviors are deserving of praise in a social context

The Impact of Ice Cover and Sediment Nonuniformity on Erosion Around Hydraulic Structures

Based on two case studies, the impact of ice cover on local scour around bridge piers is presented in this chapter. Bed material with different grain sizes is used and ice covers with different roughness is used to study the scour characteristics. The impact of nonuniformity of sediment is also investigated. Results show that with the increase in densimetric Froude number, there is a corresponding increase in the dimensionless scour depth. For nonuniform sediment, due to the formation of an armor layer, less maximum scour depth was noted around bridge foundation structures compared to uniformly distributed sediment. The increase in ice cover roughness results in a larger scour depth and geometry. The results indicate that it is imperative to pay attention to the impact of ice cover on the scour around hydraulic structures

Experimental Study of Local Scour around Side-by-Side Bridge Piers under Ice-Covered Flow Conditions

A precise prediction of maximum scour depth (MSD) around piers under ice-covered conditions is crucial for the safe design of the bridge foundation. Due to the lack of information for local scour under ice-covered flow condition, it is extremely hard to give proper estimation of MSD. In the current study, a set of flume experiments were completed to investigate local scour around four pairs of circular bridge piers with nonuniform bed materials under open channel, smooth and rough ice cover conditions. Three different bed materials with median particle size of 0.47, 0.50, and 0.58 mm were used to simulate natural river conditions. Regardless of pier size, the maximum scour depths were observed in front of the piers under all flow conditions. Additionally, a smaller pier size and a larger space between piers yield a smaller scour depth. Results showed that the maximum scour depth decreases with increase in the grain size of armor layer. The distribution of vertical velocity shows that the strength of downfall velocity is the greatest under rough ice cover. Empirical equations were developed to estimate the maximum scour depth around side-by-side bridge piers under both open-channel and ice-covered flow conditions

Grey matter volume and amplitude of low-frequency fluctuations predicts consumer ethnocentrism tendency

This work was supported by the National Natural Science Foundation of China (Grant No. 71872097) awarded to Xiaoang Wan. Comments concerning this article should be sent to Prof. Xiaoang Wan at [email protected] or Dr. Jie Sui at [email protected]. CRediT authorship contribution statement Jianping Huang: Methodology, Investigation, Data curation, Writing - original draft, Writing - review & editing, Visualization. Xiaoang Wan: Conceptualization, Writing - original draft, Writing - review & editing, Funding acquisition. Kaiping Peng: Conceptualization, Supervision. Jie Sui: Conceptualization, Methodology, Supervision.Peer reviewedPostprin

Profile Pictures in the Digital World : Self-Photographs Predict Better Life Satisfaction

Funding: This research was funded by the Leverhulme Trust (RPG-2019-010). Data Availability Statement: The data used to support the findings of this study are available from the corresponding author upon request.Peer reviewedPublisher PD

The Internet Based Electronic Voting Enabling Open and Fair Election

Voting is the pillar of modern democracies. However, examination of current voting systems (including E-voting techniques) shows a gap between casting secret ballots and tallying and verifying individual votes. This gap is caused by either disconnection between the vote-casting process and the vote-tallying process, or opaque transition (e.g. due to encryption) from vote- casting to vote-tallying and thus, damages voter assurance, i.e. failing to answer the question: “Will your vote count?” We proposed a groundbreaking E-voting protocol that fills this gap and provides a fully transparent election. In this new voting system, this transition is seamless, viewable, and verifiable. As a result, the above question can be answered assuredly: “Yes, my vote counts!” The new E-voting protocol is fundamentally different from all existing voting/E-voting protocols in terms of both concepts and the underlying mechanisms. It consists of three innovative Technical Designs: TD1: universal verifiable voting vector; TD2: forward and backward mutual lock voting; and TD3: in-process verification and enforcement. The new technique is the first fully transparent E-voting protocol which fills the aforementioned gap. The trust is split equally among all tallying authorities who are of conflict-of-interest and will technologically restrain from each other. As a result, the new technique enables open and fair elections, even for minor or weak political parties. It is able to mitigate errors and risk and detect fraud and attacks including collusion, with convincingly high probability 1 − 2−(m−log(m))n (n: #voters and m ≥ 2:#candidates). It removes many existing requirements such as trusted central tallying authorities, tailored hardware or software, and complex cryptographic primitives. In summary, the new e- voting technique delivers voter assurance and can transform the present voting booth based voting and election practice. Besides voting and elections, the new technique can also be adapted to other applications such as student class evaluation, rating and reputation systems

Fully Bayesian Analysis of Relevance Vector Machine Classification With Probit Link Function for Imbalanced Data Problem

The original RVM classification model uses the logistic link function to build the likelihood function making the model hard to be conducted since the posterior of the weight parameter has no closed-form solution. This article proposes the probit link function approach instead of the logistic one for the likelihood function in the RVM classification model, namely PRVM (RVM with the probit link function). We show that the posterior of the weight parameter in PRVM follows the Multivariate Normal distribution and achieves a closed-form solution. A latent variable is needed in our algorithms to simplify the Bayesian computation greatly, and its conditional posterior follows a truncated Normal distribution. Compared with the original RVM classification model, our proposed one is a Fully Bayesian approach, and it has a more efficient computation process. For the prior structure, we first consider the Normal-Gamma independent prior to propose a Generic Bayesian PRVM algorithm. Furthermore, the Fully Bayesian PRVM algorithm with a hierarchical hyperprior structure is proposed, which improves the classification performance, especially in the imbalanced data problem