Weekly Roundup 190: A Curated Linkfest For The Smartest People On The Web!
Handpicked to satisfy your intellectual curiosity!
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Our Education System Cartoon
Activist’s Corner: Inspiring you to become a better citizen
Her ‘Crime’ Was Loving Schools – via uvealblues.blogspot.com – Twice the Taliban threw warning letters into the home of Malala Yousafzai, a 14-year-old Pakistan girl who is one of the world’s most persuasive advocates for girls’ education. They told her to stop her advocacy — or else.She refused to back down, stepped up her campaign and even started a fund to help impoverished Pakistani girls get an education. So, on Tuesday, masked gunmen approached her school bus and asked for her by name. Then they shot her in the head and neck. “Let this be a lesson,” a spokesman for the Pakistani Taliban, Ehsanullah Ehsan, said afterward. He added that if she survives, the Taliban would again try to kill her. Surgeons have removed a bullet from Malala, and she remains unconscious in critical condition in a hospital in Peshawar. A close family friend, Fazal Moula Zahid, told me that doctors are hopeful that there has been no brain damage and that she will ultimately return to school.
Ted Talk: My battle to expose government corruption – via Video on TED.com – Our leaders need to be held accountable, says journalist Heather Brooke. And she should know: Brooke uncovered the British Parliamentary financial expenses that led to a major political scandal in 2009. She urges us to ask our leaders questions through platforms like Freedom of Information requests — and to finally get some answers.
How to fix America from below- via The Boston Globe – Behind Gerken’s Democracy Index lies another, bigger argument about how a society should work: When properly leveraged, the disorder and chaos that arises in a country as big as ours can be forces for progress and reform. This principle has defined not only Gerken’s thinking about elections, but a range of iconoclastic, provocative arguments that have launched a new conversation in the legal world about how, exactly, American power should be distributed. And Gerken herself has emerged in recent years as one of the most closely watched young stars in the legal academy.
Seduction by Contract: Crafting Contracts To Play on Biases – via thesituationist.wordpress.com – Consumers routinely enter into contracts with providers of goods and services. These contracts are designed by sophisticated sellers to exploit the psychological biases of consumers. They provide short-term benefits, while imposing long-term costs – because consumers are myopic and optimistic. They are excessively complex – because complexity allows sellers to hide the true cost of the product or service from the imperfectly rational consumer. Using both general theory and detailed case studies, this book explains the costs – to consumers and society at large – imposed by seductive contracts, and outlines a promising legal policy solution: Disclosure mandates. Simple, aggregate disclosures can help consumers make better choice. Comprehensive disclosures can facilitate the work of intermediaries, enabling them to better advise consumers. Effective disclosure would expose the seductive nature of consumer contracts and, as a result, reduce sellers’ incentives to write inefficient contracts.
How to write about poverty – via TLS – S uppose you want to wake people up to the human cost of poverty and to energize them with some urgency towards productive social action. And suppose you are a skilled writer. Your public, though well intentioned, is ignorant and more than a little obtuse, inclined to think of the lives of the poor (especially, perhaps, the distant or foreign poor) as not equally real. How do you write, if you want to inform their perceptions and inspire useful choices?You could, of course, present your audience with a lot of data; but data don’t easily reach the part of our minds with which we see others as fully human. (It is said of Louisa Gradgrind in Dickens’s Hard Times that she had learned of the poor of Coketown as if they were so many ants and beetles, “passing to and from their nests”). It is plausible to think what Dickens clearly thought: that you can’t really change the heart without telling a story. What Dickens knew intuitively has now been confirmed experimentally. C. Daniel Batson’s magisterial work on empathy and altruism shows that a particularized narrative of suffering has unique power to produce motives for constructive action.
Infographic- Conflict History: All Human Conflicts on a Single Map – via information aesthetics – Conflict History [conflicthistory.com], developed by TecToys, summarizes all major human conflicts onto a single world map – from the historical wars way before the birth of Christ, until the drone attacks in Pakistan that are still happening today. The whole interactive map is build upon data retrieved from Google and Freebase open data services.
The Longform Guide to the CIA – via Longform – Argo, Blackwater, operatives in the media and missions gone bad—a collection of spy stories, new at Slate.
The Global Sociology Blog – It’s The Inequalities, Stupid – A Never – via Ending Story – “Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percentof the income gains in the first full year of the recovery.The yawning gap between the haves and the have-nots — and the political questions that gap has raised about the plight of the middle class — has given rise to anti-Wall Street sentiment and animated the presidential campaign. Now, a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead, as well.“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the I.M.F. concluded.”
The Scariest Little Corner of the World – via Longform – Zaranj: the bloody border of Iran, Afghanistan and Pakistan.
The CIA Burglar Who Went Rogue – via Longform – A spy takes on his own agency.
Miguel’s Favorites: An Eclectic Collection of Readings from the web
How Do You Learn to Walk? Thousands of Steps and Dozens of Falls per Day – via pss.sagepub.com – A century of research on the development of walking has examined periodic gait over a straight, uniform path. The current study provides the first corpus of natural infant locomotion derived from spontaneous activity during free play. Locomotor experience was immense: Twelve- to 19-month-olds averaged 2,368 steps and 17 falls per hour. Novice walkers traveled farther faster than expert crawlers, but had comparable fall rates, which suggests that increased efficiency without increased cost motivates expert crawlers to transition to walking. After walking onset, natural locomotion improved dramatically: Infants took more steps, traveled farther distances, and fell less. Walking was distributed in short bouts with variable paths—frequently too short or irregular to qualify as periodic gait. Nonetheless, measures of periodic gait and of natural locomotion were correlated, which indicates that better walkers spontaneously walk more and fall less. Immense amounts of time-distributed, variable practice constitute the natural practice regimen for learning to walk.
Dan Ariely’s Latest Podcast: The Crooked Path To Wealth – via Duke University on iTunes
A 1945 Essay on Information Overload, “Curation,” and Open-Access Science – via Brain Pickings – Tim O’Reilly recently admonished that unless we embrace open access over copyright, we’ll never get science policy right. The sentiment, which I believe applies to more than science, reminded me of an eloquent 1945 essay by Vannevar Bush, then-director of the Office of Scientific Research and Development, titled “As We May Think.” As the war, with its exploitation of science and technology, draws to a close, Bush turns a partly concerned, partly hopeful eye to where scientists will rediscover “objectives worthy of their best” and calls for “a new relationship between thinking man and the sum of our knowledge.
Google Brings History to Life with 42 New Online Exhibitions – via Open Culture -Earlier this year, Google expanded Art Project, a vast collection of artwork curated into exhibits by real museums around the world and by regular folks like you and me. (See our original post here.) Not much later the Nelson Mandela Archive went online, featuring rare photos, manuscripts and videos related to the civil rights leader. And, more recently we brought you news about Google’s World Wonders Project, which includes amazing panoramic shots of coral reefs produced in collaboration with a major oceanic study.Turns out that these projects were just a taste of what was to come. With 17 different cultural institutions as partners, Google has built a robust, umbrella Cultural Institute to house 42 new online exhibitions. Each exhibit features, in Google’s words, ”a narrative which links the archive material together to unlock the different perspectives, nuances and tales behind these events.” The exhibits also benefit from an abundance of poignant human stories.
A List of 60 Free Courses Granting Certificates from Great Universities (Some Starting This Week!) – via Open Culture – Earlier this year we began telling you about a potential revolution in education — the birth of MOOCs, or Massive Open Online Courses. As explained above, these courses let students, thousands at a time, take courses from great universities for free online. What’s more, most of these courses offer students a credential — something like a certificate of completion — if they master the material covered in the class. Some of the MOOC providers are well known: Coursera, Udacity, and edX. Others, like Class2Go, Google Course Builder and Venture Lab, are just emerging. But, together, they’re producing courses at breakneck speed, and we thought it was time to start organizing a list for you.
Freeman Dyson: What Can You Really Know? – via The Browser – “For most of the 25 centuries since written history began, philosophers were important. They had a deep influence in the worlds of politics and morality as well as in science and scholarship.” Not any more. But why not?
The Most Popular Interview Question: Why Are Manhole Covers Round? A Laboratory Study of Reactions to Puzzle Interviews - via Wiley Online Library – Popularized by Microsoft in the 1990s, the puzzle interview is being used with greater frequency by employers in a variety of industries. The present study was designed to explore applicant reactions to puzzle interviews. 360 participants watched either a puzzle interview or a behavioral interview. The job for which the interviewee was applying was also manipulated. Results showed that participant ratings of several reactions variables were significantly lower for puzzle interviews. The findings were consistent across four different jobs. Implications for the use of puzzle interviews in industry and for future research are discussed.
Interviews with interrogators – via mindhacks.com – Author Dominic Streatfeild interviewed many trained military, intelligence and police interrogators for his book Brainwash and I’ve just realised he’s put the full text of the interviews online.
Fact-Checking The Use Of The Word ‘Fact’ - via The Browser – We all know what a fact is, don’t we? Then why do so many of us unthinkingly misuse the word “fact”? Or use it as part of a phrase that would be better eliminated. Often, if it’s a fact, you don’t need to say that it’s a fact
Video: The Neurochemistry of Storytelling. – via mindblog.dericbownds.net – Having in the previous post just made an ill-tempered dump on one kind of popularization, I decide to be inconsistent and now pass on this nice piece with a little less pizazz from the Brain Pickings Newsletter, on how storytelling can engage our brain neurochemistry associated with stress and empathy. It is a very effective and touching piece, and I recommend that you watch the video below:
Interview with Eric Kandel: Psychoanalysis, Art and Biology Come Together – via SPIEGEL ONLINE – Eric Kandel is considered one of the world’s most important neuroscientists. He recently published a book about the creative power of Vienna, the city of his birth. In an interview, he discusses the demonic side of man and the postcoital perspectives offered in Gustav Klimt’s paintings.
Brains Plus Brawn: A conversation with an Evolutionary Biologist – via Edge – There are many other features in the head that help us become exceptional long-distance walkers and runners. I became obsessed with the idea that humans evolved to run long distances, evolved to walk long distances, basically evolved to use our bodies as athletes. These traces are there in our heads along with those brains.
The Rise and Fall of the Cincinnati Boner King – via Longform – A jailhouse interview with Steve Washak, who made millions selling “natural male enhancement” pills.
The Incredible Rise and Fall of High-Flying Art Scammers- via Vanity Fair – One of his forgeries hung in a show at the Met. Steve Martin bought another of his fake paintings. Still others have sold at auction for multi-million-dollar prices. So how did a self-described German hippie pull off one of the biggest, most lucrative cons in art-world history? And how did he get nailed?
What If Money Was No Object?: Thoughts on the Art of Living from Eastern Philosopher Alan Watts – via Open Culture -Alan Watts came to San Francisco during the early 1950s, wrote his bestseller Way of Zen, and became one of the foremost popularizers of Zen Buddhism, Hinduism, Taoism and various forms of Eastern philosophy. His TV show, Eastern Wisdom and Modern Life (1960), introduced Americans to the seemingly exotic concept of meditation (watch here). And his radio show and lectures forced listeners to pause and look at their lives from a fresh perspective. Again and again, Watts challenged the Western emphasis on money-making to the exclusion of all else. We’ve heard Watts rail against this soul-crushing value in a lecture animated by the creators of South Park. (I’m not kidding you.) And, in the newly-produced video above, he continues along the same trajectory. So, as you drink your morning coffee and ponder your day, ask yourself: Are you putting money-making before happiness itself? Or are you pursuing the passions that bring happiness, achieving excellence, and then letting the money follow? With that, I’ll let you continue with your day.
Nobel Laureate: Akerloff on Efficient Markets Hypothesis – via infoproc.blogspot.com – I particularly like his comments (@13 min or so) on Snake Oil and financial assets. When market participants are exuberant (overly confident) it is natural for firms to create and market new assets that are overpriced relative to actual value, or have dangerous risk-return tradeoffs. For the latest example, in natural gas drilling rights during the recent boom (now a bust), see here.
Complexity in the anticipation of hazard and risk, and in the development of resilience – via ihrrblog.org – Professor Dave Petley presents how landslide hazards occur throughout the world, but especially in countries where people are most vulnerable such as China, India and Nepal. Prof Petley demonstrates the need for natural scientists, social scientists and social workers to work together to mitigate the risk of landslide hazards and increase resilience.
Economies of Scale, Economies of Scope – via www.ribbonfarm.com – I’ve been trying hard over the last several weeks to wrestle a very tough idea to the ground: economies of variety. Yes, there is such a thing, and I don’t mean either the Starbucks menu of mass-customized combinatorial choices or some charming favela economy that has variety, but not economies of variety. Economies of variety are related to, but not the same thing as, the idea of superlinearity.
Othello Syndrome, Denial, and Delusion – via Neuroanthropology – Othello Syndrome is a type of delusional jealousy, marked by suspecting a faithful partner of infidelity, with accompanying jealousy, attempts at monitoring and control, and sometimes violence. The problem is named for Shakespeare’s Othello, who murdered his beautiful wife Desdemona because he believed her unfaithful.
Google Throws Open Doors To Its Top-Secret Data Center- via The Browser – Visit to the “beating heart of the digital age”. Server farm in North Carolina. “This is what makes Google Google: Thousands of fiber miles, thousands of servers that, in aggregate, add up to the mother of all clouds”
In Defence Of Idleness- via The Browser – Loafers and moochers are having a hard time of it just now, whether in the UK or the US. So here’s a little contrarian thinking to mull over. And a warning from Bertrand Russell not to overestimate the virtue of work
How the Invention of Walls Gave Rise to Eavesdropping – via Brain Pickings – But one of Locke’s most intriguing insights traces how the evolution of human civilization, and the rise of urbanization in particular, shaped the norms of — and necessity for — eavesdropping
The Decision Maker’s Corner: Psychology, Behavioral Economics, and Other Behavioral Sciences
Why Lance Armstrong’s Teammates Snitched – via www.psmag.com – Today’s report by the US Anti-Doping Agency, leaked within the past few hours, confirms that suspicion. It’s almost entirely based on claims by former teammates and others who say they saw Armstrong take banned, performance-enhancing drugs; talk about them; shared some with him; or helped him arrange access. So the question now is less one of medicine or sports science, than criminal psychology. What compelled people to talk?
The Winner Effect – via Mind Your Decisions – In biology, an animal that beats a weaker opponent “gets on a roll” and is then more likely to defeat a stronger opponent. This “winner effect” is a result of a hormonal change: after the animal wins one round, its body chemistry actually changes. Animals who win are primed to continue to succeed.Humans are animals too, and hence biology plays a role in our success. Are winners born or are they made? What factors cause a rise to power? How does power change our personality, and influence our longevity? And why is it that some people abuse power and others don’t?
The Marshmallow Test Gets More Complicated – via Surprising Science – The study doesn’t invalidate the marshmallow test–willpower is still important–but it does mean that people shouldn’t look at kids who fail the test as being instantly doomed to failure. Instead, parents of kids who appear to lack self control might want to look more closely at why they would eat the marshmallow–is it because they can’t wait or because they can’t trust that the next marshmallow will appear?
Do Highly-Educated People Have Lousy Financial Discipline? – via www.psmag.com – A study by Ohio State University has found that the more educated you are, the more likely you are to take on irresponsible levels of debt.
Does Money Burn Fat? - via papers.ssrn.com – We test whether financial incentives have an effect on weight reduction in a randomized controlled trial involving 700 obese persons assigned to three experimental groups. While two treatment groups obtain €150 and €300, respectively, for achieving an individually assigned target weight within four months, a control group receives no such premium. The results indicate that the weight losses for the treatment groups are 2.6 and 2.9 percentage points higher than that achieved by the control group, raising the average total weight loss for the incentivized groups to 5 percent of the initial weight. This percentage is typically regarded as a threshold to improve the health status of the obese. Further evidence indeed indicates some health improvements. The higher reward causes only the group of obese women to lose more weight. Overall, the results suggest that financial incentives can motivate people to lose weight significantly.
Spirituality = Lesser Conspicuous Consumption? – via Psychology Today – In the first of two studies, they measured individuals’ levels of spirituality as well as their proclivity to engage in conspicuous consumption. As predicted, they found that people who reported being more spiritual were less predisposed to engage in showy behavior. This relationship was mediated by a person’s level of materialism (greater spirituality -> lesser materialism -> lesser conspicuous consumption). While the first study was correlational, the authors conducted next an experimental study in which they primed participants to either think of a spiritual experience or an enjoyable one (control group). The experimental prime was successful in that it generated the requisite difference in felt spirituality across the two groups whilst it did not yield any difference in affect (i.e., any differences along showy behavior could not be driven by a differential level of affect across the two groups). The results were very similar to those found in study 1, namely the group that was primed to think about a spiritual experience was less inclined to engage in conspicuous consumption, and materialism had the same meditational effect as in the first study.
Does the Physical Appearance of Money Influence spending – via www.jstor.org – Despite evidence that currency denomination can influence spending, researchers have yet to examine whether the physical appearance of money can do the same. This is important because smaller denomination bills tend to suffer greater wear than larger denomination bills. Using real money in the context of real purchases, this article demonstrates that the physical appearance of money can override the influence of denomination. The reason being, people want to rid themselves of worn bills because they are disgusted by the contamination from others, whereas people put a premium on crisp currency because they take pride in owning bills that can be spent around others. This suggests that the physical appearance of money matters more than traditionally thought, and like most things in life, it too is inextricably linked to the social context. The results suggest that money may be less fungible than people think.
How Guilt and Pride Shape Self Control- via Sage Pub – The present research utilized experience sampling data to investigate how guilt and pride experiences in response to self-control failure versus success affect future self-control when encountering the same type of temptation (thematic self-control). Guilt showed signs of a “mixed blessing” such that previous guilt led to an increase in subsequent self-regulatory goal importance and conflict awareness; however, accounting for these beneficial effects, guilt also had a detrimental residual effect on the successful inhibition of recurring temptation. Pride, in contrast, had uniformly positive effects on subsequent self-control in the form of increased goal importance, increased conflict, and increased likelihood to use self-control to resist temptation. These results contrasted in theoretically important ways from an analysis of short-term spillover effects of incidental guilt and pride on thematically unrelated subsequent self-control. Potential mechanisms and implications of these findings are discussed.
Life Regrets and the Need to Belong – via spp.sagepub.com – The present research documents a link between regret and the need to belong. Across five studies, using diverse methods and samples, the authors established that regrets involving primarily social relationships (e.g., romance and family) are felt more intensely than less socially based regrets (e.g., work and education). The authors ruled out alternative explanations for this pattern and found that it is best explained by the extent to which regrets are judged to constitute threats to belonging. Threats to belonging at the regret level and the need to belong at the individual level were strong predictors of regret intensity across multiple regret domains. These findings highlight the central role social connectedness plays in what people regret most.
The Least Likely Act – via spp.sagepub.com – When people predict the future behavior of a person, thinking of that target as an individual decreases the accuracy of their predictions. The present research examined one potential source of this bias, whether and why predictors overweight the atypical past behavior of individuals. The results suggest that predictors do indeed overweight the atypical past behavior of an individual. Atypical past behavior is more cognitively accessible than typical past behavior, which leads it to be overweighted in the impressions that serve as the basis for their predictions. Predictions for group members appear less susceptible to this bias, presumably because predictors are less likely to form a coherent impression of a group than an individual before making their predictions.
How Money Addled Are You? – via therearefreelunches.blogspot.com – Research on the effects of socioeconomic status on behavior involves isolating a variety of human impulses, including empathy, ethics, and generosity. Here, we’ve adapted components of the Berkeley team’s techniques to create our own test. Is money making you a monster?
Alain de Botton: Does Advertising Confuse Us? – via therearefreelunches.blogspot.com – Watch here, a very short video (1:41) from Alain de Botton, about the effect of advertising on people:
The transitivity of trust – via www.overcomingbias.com – Suppose you tell a close friend a secret. You consider them trustworthy, and don’t fear for its release. Suppose they request to tell the secret to a friend of theirs who you don’t know. They claim this person is also highly trustworthy. I think most people would feel significantly less secure agreeing to that.
Studying Near Miss Effects in Gambling – via SpringerLink – Near-misses in slot machines resemble jackpot wins but fall just short. Previous research has demonstrated that near-misses are behaviorally reinforcing despite the absence of monetary reward. We assessed the hedonic properties of near-misses by measuring the time between outcome delivery and the initiation of the next spin—the post-reinforcement pause (PRP) and skin conductance responses (SCRs) for losses, near-misses, and a range of wins (5, 15, 25, 50 or 250 credits) while participants (N = 122) played a slot machine simulator. PRPs and SCRs were compared for 40 low frequency and 22 high frequency slots players who were non-problem gamblers, 37 at risk players, and 23 problem gamblers. For winning outcomes, PRPs and SCRs tracked monotonically with win size such that progressively larger wins were associated with progressively larger PRPs and SCRs. Near-misses with jackpot symbols landing on the first two reels had significantly larger SCRs than regular losses, and other types of near misses. Crucially, PRPs for this kind of near-miss were significantly smaller than all wins, and when non-parametric statistics were used, significantly smaller than regular losses. This pattern of large SCRs and small PRPs suggest that these are highly frustrating outcomes that stimulate appetitive components of the reward system to promote continued gambling.
Poker and losing control due to negative emotions – via SpringerLink – In poker, detrimental decision-making as a result of losing control due to negative emotions is known as tilting. Previous evidence suggests that poker experience is related to better emotion regulation in dealing with poker losses, and possibly to reduced severity of tilting in the game. A correlational on-line study (N = 417) was conducted to operationalize the tilting phenomenon by defining certain experiential characteristics that conceivably protect players from tilting or predispose them to it. These characteristics, as well as a measurement of poker experience, were then used in predicting the severity of tilting. It was hypothesized that (1) players with more poker experience are more likely to perceive having tilted less severely, as a result of accumulating poker experience; (2) players with more poker experience have lower severity of tilting; (3) players with more poker experience report lower emotional sensitivity to losses; and (4) players with a higher emotional sensitivity to losses have higher severity of tilting. Hypotheses 1 and 4 were supported, hypothesis 3 was weakly supported, but contrary to hypothesis 2, poker experience was associated with higher tilting severity. It is argued that these results are sensible if experienced players are less likely to tilt in relative terms, per single hand, but more likely to tilt in the long run.
More on False Positive Neuroimaging – via neuroskeptic.blogspot.com – In my experience, fMRI researchers are actually fairly conservative in terms of using different analyses, and certainly I doubt anyone has ever run thousands of them just to get the result they want and I’d estimate that most published findings are not the result of more than a handful of ‘attempts’ at most.
All Things Business – Economics, Entrepreneurship, Finance, Investing
Believe the hype in hyperinflation – via By Tim Harford – First, hyperinflation is a phenomenon of the modern era: with a single exception, every hyperinflation has occurred since the end of the first world war. The outlier is revolutionary France, where monthly inflation passed 300 per cent in the summer of 1796.
A Bias For Real Estate – via PsyFi Blog- However, you’d expect that if we’re strangely biased when it comes to financial transactions involving the stockmarket that we might also be a bit slanty-brained when it comes to other asset classes as well. And as real-estate is probably the biggest single investment any of us will ever make it’s probably a prime candidate for a bit of behavioral analysis.
Book notes: The Visible Hand – via Max Olson & Value Investing World – The Visible Hand: The Managerial Revolution in American Business was written by Alfred Chandler and released in 1977. It’s a great history and study on business and why it exists the way it does today. For some books I read, I transcribe and summarize my highlights/notes in order to better learn the material and for future reference. Below you’ll find my (very long) summary of The Visible Hand. Some passages are direct quotes and others are my own paraphrasing/summaries. So if you’re interested in this sort of topic, send this baby to Instapaper, plop down on the couch, and enjoy.
How big is too big? Critical Shocks for Systemic Failure Cascades – via arxiv.org – xternal or internal shocks may lead to the collapse of a system consisting of many agents. If the shock hits only one agent initially and causes it to fail, this can induce a cascade of failures among neighoring agents. Several critical constellations determine whether this cascade remains finite or reaches the size of the system, i.e. leads to systemic risk. We investigate the critical parameters for such cascades in a simple model, where agents are characterized by an individual threshold theta_i determining their capacity to handle a load alphatheta_i with 1-alpha being their safety margin. If agents fail, they redistribute their load equally to K neighboring agents in a regular network. For three different threshold distributions P(theta), we derive analytical results for the size of the cascade, X(t), which is regarded as a measure of systemic risk, and the time when it stops. We focus on two different regimes, (i) EEE, an external extreme event where the size of the shock is of the order of the total capacity of the network, and (ii) RIE, a random internal event where the size of the shock is of the order of the capacity of an agent. We find that even for large extreme events that exceed the capacity of the network finite cascades are still possible, if a power-law threshold distribution is assumed. On the other hand, even small random fluctuations may lead to full cascades if critical conditions are met. Most importantly, we demonstrate that the size of the “big” shock is not the problem, as the systemic risk only varies slightly for changes of 10 to 50 percent of the external shock. Systemic risk depends much more on ingredients such as the network topology, the safety margin and the threshold distribution, which gives hints on how to reduce systemic risk.
Global Stability of Financial Networks Against Contagion: Measure, Evaluation and Implications – via arxiv.org – Involvements of major financial institutions in the recent financial crisis have generated renewed interests in fragility of global financial networks among economists and regulatory authorities. In particular, one potential vulnerability of the financial networks is the “financial contagion” process in which insolvencies of individual entities propagate through the “web of dependencies” to affect the entire system. In this paper, we formalize a banking network model originally proposed by researchers from Bank of England and elsewhere that may be applicable to scenarios such as the OTC derivatives market, define a global stability measure for this model, and comprehensively evaluate the stability measure over more than 700,000 combinations of networks types and parameter combinations. Based on such comprehensive evaluations, we discuss some interesting implications of our evaluations of this stability measure, and derive topological properties and parameters combinations that may be used to flag the network as a possible fragile network.
Wealth distribution on complex networks – via arxiv.org – We study the wealth distribution of the Bouchaud model on complex networks. It has been known that this distribution depends on the topology of network by numerical simulations, however, no one have succeeded to explain it. Using “adiabatic” and “independent” assumptions along with the central-limit theorem, we derive equations that determine the probability distribution function. The results are compared to those of simulations for various networks. We find good agreement between our theory and the simulations, except the case of Watts–Strogatz networks with a low rewiring rate, due to the breakdown of independent assumption
PivotPaths: a Fluid Exploration of Interlinked Information Collections – via information aesthetics – PivotPaths [mariandoerk.de], developed by Marian Dörk and several academic collaborators, is an interactive visualization for exploring the interconnections between multiple resources. In its current demo rendition, the visualization is linked to an academic publication database, so one can filter for a specific research keyword or the name of an academic researcher.
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