Symmetry in Critical Random Boolean Network Dynamics

Using Boolean networks as prototypical examples, the role of symmetry in the dynamics of heterogeneous complex systems is explored. We show that symmetry of the dynamics, especially in critical states, is a controlling feature that can be used both to greatly simplify analysis and to characterize different types of dynamics. Symmetry in Boolean networks is found by determining the frequency at which the various Boolean output functions occur. There are classes of functions that consist of Boolean functions that behave similarly. These classes are orbits of the controlling symmetry group. We find that the symmetry that controls the critical random Boolean networks is expressed through the frequency by which output functions are utilized by nodes that remain active on dynamical attractors. This symmetry preserves canalization, a form of network robustness. We compare it to a different symmetry known to control the dynamics of an evolutionary process that allows Boolean networks to organize into a critical state. Our results demonstrate the usefulness and power of using the symmetry of the behavior of the nodes to characterize complex network dynamics, and introduce a novel approach to the analysis of heterogeneous complex systems

Martingales, the efficient market hypothesis, and spurious stylized facts

The condition for stationary increments, not scaling, detemines long time pair autocorrelations. An incorrect assumption of stationary increments generates spurious stylized facts, fat tails and a Hurst exponent Hs=1/2, when the increments are nonstationary, as they are in FX markets. The nonstationarity arises from systematic uneveness in noise traders’ behavior. Spurious results arise mathematically from using a log increment with a ‘sliding window’. We explain why a hard to beat market demands martingale dynamics , and martingales with nonlinear variance generate nonstationary increments. The nonstationarity is exhibited directly for Euro/Dollar FX data. We observe that the Hurst exponent Hs generated by the using the sliding window technique on a time series plays the same role as does Mandelbrot’s Joseph exponent. Finally, Mandelbrot originally assumed that the ‘badly behaved second moment of cotton returns is due to fat tails, but that nonconvergent behavior is instead direct evidence for nonstationary increments. Summarizing, the evidence for scaling and fat tails as the basis for econophysics and financial economics is provided neither by FX markets nor by cotton price data