Incentive-Aware Models of Financial Networks

Financial networks help firms manage risk but also enable financial shocks to spread. Despite their importance, existing models of financial networks have several limitations. Prior works often consider a static network with a simple structure (e.g., a ring) or a model that assumes conditional independence between edges. We propose a new model where the network emerges from interactions between heterogeneous utility-maximizing firms. Edges correspond to contract agreements between pairs of firms, with the contract size being the edge weight. We show that, almost always, there is a unique "stable network." All edge weights in this stable network depend on all firms' beliefs. Furthermore, firms can find the stable network via iterative pairwise negotiations. When beliefs change, the stable network changes. We show that under realistic settings, a regulator cannot pin down the changed beliefs that caused the network changes. Also, each firm can use its view of the network to inform its beliefs. For instance, it can detect outlier firms whose beliefs deviate from their peers. But it cannot identify the deviant belief: increased risk-seeking is indistinguishable from increased expected profits. Seemingly minor news may settle the dilemma, triggering significant changes in the network

Decompositions of Triangle-Dense Graphs

High triangle density -- the graph property stating that a constant fraction of two-hop paths belong to a triangle -- is a common signature of social networks. This paper studies triangle-dense graphs from a structural perspective. We prove constructively that significant portions of a triangle-dense graph are contained in a disjoint union of dense, radius 2 subgraphs. This result quantifies the extent to which triangle-dense graphs resemble unions of cliques. We also show that our algorithm recovers planted clusterings in approximation-stable k-median instances.Comment: 20 pages. Version 1->2: Minor edits. 2->3: Strengthened {\S}3.5, removed appendi

Storia: Summarizing Social Media Content based on Narrative Theory using Crowdsourcing

People from all over the world use social media to share thoughts and opinions about events, and understanding what people say through these channels has been of increasing interest to researchers, journalists, and marketers alike. However, while automatically generated summaries enable people to consume large amounts of data efficiently, they do not provide the context needed for a viewer to fully understand an event. Narrative structure can provide templates for the order and manner in which this data is presented to create stories that are oriented around narrative elements rather than summaries made up of facts. In this paper, we use narrative theory as a framework for identifying the links between social media content. To do this, we designed crowdsourcing tasks to generate summaries of events based on commonly used narrative templates. In a controlled study, for certain types of events, people were more emotionally engaged with stories created with narrative structure and were also more likely to recommend them to others compared to summaries created without narrative structure