IDEAS home Printed from https://ideas.repec.org/a/eee/phsmap/v540y2020ics037843711931800x.html
   My bibliography  Save this article

Optimization of the post-crisis recovery plans in scale-free networks

Author

Listed:
  • Bahrami, Mohammad
  • Chinichian, Narges
  • Hosseiny, Ali
  • Jafari, Gholamreza
  • Ausloos, Marcel

Abstract

General Motors or a local business, which one is it better to be stimulated in postcrisis recessions, when government stimulation is meant to overcome recessions? Due to the budget constraints, it is quite relevant to ask how government can increase the chance of economic recovery. One of the key elements to answer this question is to understand metastable features of crises in economic networks and their related hysteresis. The Ising model has been suggested for studying such features. In the homogeneous networks, one needs at least a minimum budget, to force the network to switch its local equilibria, where such a minimum is independent of the network characteristics such as the average degree. In the scale free networks however, when the government aims to push the network to switch to another equilibrium, one may wonder which nodes are to be preferably stimulated in order to minimize the cost. In this paper, it is shown that stimulation of high degree nodes costs less in general. It is also found that in scale free networks, the stimulation cost depends on the networks features such as its assortativity. Although we confine our study to the Ising model in order to tackle a problem in economics, our analysis shines lights on many other problems concerning stimulations of socio-economic systems where dynamical hysteresis appears.

Suggested Citation

  • Bahrami, Mohammad & Chinichian, Narges & Hosseiny, Ali & Jafari, Gholamreza & Ausloos, Marcel, 2020. "Optimization of the post-crisis recovery plans in scale-free networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).
  • Handle: RePEc:eee:phsmap:v:540:y:2020:i:c:s037843711931800x
    DOI: 10.1016/j.physa.2019.123203
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S037843711931800X
    Download Restriction: Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

    File URL: https://libkey.io/10.1016/j.physa.2019.123203?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rotundo, G. & Ausloos, M., 2010. "Organization of networks with tagged nodes and biased links: A priori distinct communities," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(23), pages 5479-5494.
    2. Dur, Robert & Sol, Joeri, 2010. "Social interaction, co-worker altruism, and incentives," Games and Economic Behavior, Elsevier, vol. 69(2), pages 293-301, July.
    3. Battiston, Stefano & Delli Gatti, Domenico & Gallegati, Mauro & Greenwald, Bruce & Stiglitz, Joseph E., 2012. "Liaisons dangereuses: Increasing connectivity, risk sharing, and systemic risk," Journal of Economic Dynamics and Control, Elsevier, vol. 36(8), pages 1121-1141.
    4. Hosseiny, Ali, 2017. "A geometrical imaging of the real gap between economies of China and the United States," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 479(C), pages 151-161.
    5. A. O. Sousa & T. Yu-Song & M. Ausloos, 2008. "Effects of agents' mobility on opinion spreading in Sznajd model," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 66(1), pages 115-124, November.
    6. Dangalchev, Chavdar, 2004. "Generation models for scale-free networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 338(3), pages 659-671.
    7. William A. Brock & Steven N. Durlauf, 2001. "Discrete Choice with Social Interactions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 235-260.
    8. Steven N. Durlauf & Yannis M. Ioannides, 2010. "Social Interactions," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 451-478, September.
    9. Aoyama,Hideaki & Fujiwara,Yoshi & Ikeda,Yuichi & Iyetomi,Hiroshi & Souma,Wataru Preface by-Name:Yoshikawa,Hiroshi, 2010. "Econophysics and Companies," Cambridge Books, Cambridge University Press, number 9780521191494, September.
    10. Ali Hosseiny & Mohammad Bahrami & Antonio Palestrini & Mauro Gallegati, 2016. "Metastable Features of Economic Networks and Responses to Exogenous Shocks," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-22, October.
    11. Hosseiny, Ali & Absalan, Mohammadreza & Sherafati, Mohammad & Gallegati, Mauro, 2019. "Hysteresis of economic networks in an XY model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 513(C), pages 644-652.
    12. Lawrence E. Blume & William A. Brock & Steven N. Durlauf & Yannis M. Ioannides, 2010. "Identification of Social Interactions," Discussion Papers Series, Department of Economics, Tufts University 0754, Department of Economics, Tufts University.
    13. Gaffeo, Edoardo & Gallegati, Mauro & Palestrini, Antonio, 2003. "On the size distribution of firms: additional evidence from the G7 countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 117-123.
    14. Giulia Rotundo & Andrea Scozzari, 2009. "Co-Evolutive Models for Firms Dynamics," Lecture Notes in Economics and Mathematical Systems, in: Ahmad K. Naimzada & Silvana Stefani & Anna Torriero (ed.), Networks, Topology and Dynamics, pages 143-158, Springer.
    15. Gatti, Domenico Delli & Guilmi, Corrado Di & Gaffeo, Edoardo & Giulioni, Gianfranco & Gallegati, Mauro & Palestrini, Antonio, 2005. "A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 489-512, April.
    16. W.-X. Zhou & D. Sornette, 2007. "Self-organizing Ising model of financial markets," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 55(2), pages 175-181, January.
    17. Anna Maria D’Arcangelis & Giulia Rotundo, 2016. "Complex Networks in Finance," Lecture Notes in Economics and Mathematical Systems, in: Pasquale Commendatore & Mariano Matilla-García & Luis M. Varela & Jose S. Cánovas (ed.), Complex Networks and Dynamics, pages 209-235, Springer.
    18. William A. Brock & Steven N. Durlauf, 2010. "Adoption Curves and Social Interactions," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 232-251, March.
    19. Daron Acemoglu & Vasco M. Carvalho & Asuman Ozdaglar & Alireza Tahbaz‐Salehi, 2012. "The Network Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 80(5), pages 1977-2016, September.
    20. Martha G. Alatriste Contreras & Giorgio Fagiolo, 2014. "Propagation of economic shocks in input-output networks: A cross-country analysis," Post-Print hal-01474258, HAL.
    21. Misra, Arkajyoti & Chakrabarti, Bikas K., 1997. "Spin-reversal transition in Ising model under pulsed field," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 246(3), pages 510-518.
    22. Luis M. Varela & Giulia Rotundo & Marcel Ausloos & Jesús Carrete, 2015. "Complex Network Analysis in Socioeconomic Models," Dynamic Modeling and Econometrics in Economics and Finance, in: Pasquale Commendatore & Saime Kayam & Ingrid Kubin (ed.), Complexity and Geographical Economics, edition 127, pages 209-245, Springer.
    23. Roy Cerqueti & Giulia Rotundo, 2015. "A review of aggregation techniques for agent-based models: understanding the presence of long-term memory," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(4), pages 1693-1717, July.
    24. Safdari, H. & Hosseiny, A. & Vasheghani Farahani, S. & Jafari, G.R., 2016. "A picture for the coupling of unemployment and inflation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 444(C), pages 744-750.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. MohammadReza Zahedian & Mahsa Bagherikalhor & Andrey Trufanov & G. Reza Jafari, 2022. "Financial Crisis in the Framework of Non-zero Temperature Balance Theory," Papers 2202.03198, arXiv.org.
    2. Jamshid Ardalankia & Jafar Askari & Somaye Sheykhali & Emmanuel Haven & G. Reza Jafari, 2020. "Mapping Coupled Time-series Onto Complex Network," Papers 2004.13536, arXiv.org, revised Aug 2020.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hosseiny, Ali & Absalan, Mohammadreza & Sherafati, Mohammad & Gallegati, Mauro, 2019. "Hysteresis of economic networks in an XY model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 513(C), pages 644-652.
    2. Ali Hosseiny & Mohammad Bahrami & Antonio Palestrini & Mauro Gallegati, 2016. "Metastable Features of Economic Networks and Responses to Exogenous Shocks," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-22, October.
    3. Maness, Michael & Cirillo, Cinzia, 2016. "An indirect latent informational conformity social influence choice model: Formulation and case study," Transportation Research Part B: Methodological, Elsevier, vol. 93(PA), pages 75-101.
    4. Mercure, Jean-François, 2018. "Fashion, fads and the popularity of choices: Micro-foundations for diffusion consumer theory," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 194-207.
    5. Hosseiny, Ali & Gallegati, Mauro, 2017. "Role of intensive and extensive variables in a soup of firms in economy to address long run prices and aggregate data," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 470(C), pages 51-59.
    6. González, Felipe, 2020. "Collective action in networks: Evidence from the Chilean student movement," Journal of Public Economics, Elsevier, vol. 188(C).
    7. Maness, Michael & Cirillo, Cinzia & Dugundji, Elenna R., 2015. "Generalized behavioral framework for choice models of social influence: Behavioral and data concerns in travel behavior," Journal of Transport Geography, Elsevier, vol. 46(C), pages 137-150.
    8. Steven N. Durlauf & Daniel S. Nagin, 2010. "The Deterrent Effect of Imprisonment," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 43-94, National Bureau of Economic Research, Inc.
    9. Leonidov, Andrey & Vasilyeva, Ekaterina, 2022. "Strategic stiffening/cooling in the Ising game," Chaos, Solitons & Fractals, Elsevier, vol. 160(C).
    10. Semih Tumen & Tugba Zeydanli, 2015. "Is Happiness Contagious? Separating Spillover Externalities from the Group-Level Social Context," Journal of Happiness Studies, Springer, vol. 16(3), pages 719-744, June.
    11. Li, Chunxiao & Gilleskie, Donna B., 2021. "The influence of endogenous behaviors among social pairs: Social interaction effects of smoking," Journal of Health Economics, Elsevier, vol. 80(C).
    12. Shi, Yuxing & Cai, Yu & Zhao, Minjuan, 2021. "Social interaction effect of rotational grazing and its policy implications for sustainable use of grassland: Evidence from pastoral areas in Inner Mongolia and Gansu, China," Land Use Policy, Elsevier, vol. 111(C).
    13. Manca, Francesco & Sivakumar, Aruna & Daina, Nicolò & Axsen, Jonn & Polak, John W, 2020. "Modelling the influence of peers’ attitudes on choice behaviour: Theory and empirical application on electric vehicle preferences," Transportation Research Part A: Policy and Practice, Elsevier, vol. 140(C), pages 278-298.
    14. Kourtellos, Andros & Petrou, Kyriakos, 2022. "The role of social interactions in preferences for redistribution," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 716-737.
    15. Michael D. König & Xiaodong Liu & Yves Zenou, 2019. "R&D Networks: Theory, Empirics, and Policy Implications," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 476-491, July.
    16. Khan, M. Ali & Rath, Kali P. & Sun, Yeneng & Yu, Haomiao, 2013. "Large games with a bio-social typology," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1122-1149.
    17. Agostinelli, Francesco & Doepke, Matthias & Sorrenti, Giuseppe & Zilibotti, Fabrizio, 2022. "When the great equalizer shuts down: Schools, peers, and parents in pandemic times," Journal of Public Economics, Elsevier, vol. 206(C).
    18. Santiago Pereda-Fernández, 2017. "Social Spillovers in the Classroom: Identification, Estimation and Policy Analysis," Economica, London School of Economics and Political Science, vol. 84(336), pages 712-747, October.
    19. William R. Kerr & Martin Mandorff, 2023. "Social Networks, Ethnicity, and Entrepreneurship," Journal of Human Resources, University of Wisconsin Press, vol. 58(1), pages 183-220.
    20. Costas Azariadis & Yannis M. Ioannides, 2014. "Thinking About Corruption in Greece," Discussion Papers Series, Department of Economics, Tufts University 0783, Department of Economics, Tufts University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:540:y:2020:i:c:s037843711931800x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.