Reducing Cascading Failure Risk by Increasing Infrastructure Network Interdependency

Increased coupling between critical infrastructure networks, such as power and communication systems, will have important implications for the reliability and security of these systems. To understand the effects of power-communication coupling, several have studied interdependent network models and reported that increased coupling can increase system vulnerability. However, these results come from models that have substantially different mechanisms of cascading, relative to those found in actual power and communication networks. This paper reports on two sets of experiments that compare the network vulnerability implications resulting from simple topological models and models that more accurately capture the dynamics of cascading in power systems. First, we compare a simple model of topological contagion to a model of cascading in power systems and find that the power grid shows a much higher level of vulnerability, relative to the contagion model. Second, we compare a model of topological cascades in coupled networks to three different physics-based models of power grids coupled to communication networks. Again, the more accurate models suggest very different conclusions. In all but the most extreme case, the physics-based power grid models indicate that increased power-communication coupling decreases vulnerability. This is opposite from what one would conclude from the coupled topological model, in which zero coupling is optimal. Finally, an extreme case in which communication failures immediately cause grid failures, suggests that if systems are poorly designed, increased coupling can be harmful. Together these results suggest design strategies for reducing the risk of cascades in interdependent infrastructure systems

Erratum: Reducing Cascading Failure Risk by Increasing Infrastructure Network Interdependence

This corrects the article DOI: 10.1038/srep44499

Fragmentation and inefficiencies in US equity markets: Evidence from the Dow 30

Using the most comprehensive source of commercially available data on the US National Market System, we analyze all quotes and trades associated with Dow 30 stocks in calendar year 2016 from the vantage point of a single and fixed frame of reference. We find that inefficiencies created in part by the fragmentation of the equity marketplace are relatively common and persist for longer than what physical constraints may suggest. Information feeds reported different prices for the same equity more than 120 million times, with almost 64 million dislocation segments featuring meaningfully longer duration and higher magnitude. During this period, roughly 22% of all trades occurred while the SIP and aggregated direct feeds were dislocated. The current market configuration resulted in a realized opportunity cost totaling over $160 million, a conservative estimate that does not take into account intra-day offsetting events