2015/03/03 by Rebekka Burkholz, Antonios Garas, Frank Schweitzer · 31 citations
Biochemistry, Genetics and Molecular Biology · Engineering · Mathematics · Physics and Astronomy · #Branching process #Business #Cascade #Cascading failure #Complex Network Analysis Techniques #Computer science #Diversification (marketing strategy) #Econometrics #Economics #Engineering #Gene Regulatory Network Analysis #Mathematics #Mesoscopic physics #Physics #Risk analysis (engineering) #Statistics #Stochastic processes and statistical mechanics #Systemic risk #physics.soc-ph
paper · pdf · doi:10.1103/physreve.93.042313
published in Physical review. E 93(4), 042313 (American Physical Society)
arxiv created 2015/03/03 · openalex publication_date 2016/04/22 · arxiv updated 2016/04/27 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
We study the influence of risk diversification on cascading failures in weighted complex networks, where weighted directed links represent exposures between nodes. These weights result from different diversification strategies and their adjustment allows us to reduce systemic risk significantly by topological means. As an example, we contrast a classical exposure diversification (ED) approach with a damage diversification (DD) variant. The latter reduces the loss that the failure of high degree nodes generally inflict to their network neighbors and thus hampers the cascade amplification. To quantify the final cascade size and obtain our results, we develop a branching process approximation taking into account that inflicted losses cannot only depend on properties of the exposed, but also of the failing node. This analytic extension is a natural consequence of the paradigm shift from individual to system safety. To deepen our understanding of the cascade process, we complement this systemic perspective by a mesoscopic one: an analysis of the failure risk of nodes dependent on their degree. Additionally, we ask for the role of these failures in the cascade amplification.