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Economic Networks: What do we know and what do we need to know?

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  • Frank Schweitzer

    ()

  • Giorgio Fagiolo
  • Didier Sornette
  • Fernando Vega-Redondo
  • Douglas R. White

Abstract

We examine the emergent field of economic networks and explore its ability to shed light on the global and volatile economy where credit, ownership, innovation, investment, and virtually every other economic activity is carried at a scale and scope that respects no geographical, organizational, or political boundaries. In this context, the study of economic networks and their dynamics must reflect the vast complexity of the interaction patterns and integrate it with a realistic account of the incentives and information that govern agents' behavior. The interplay of both has been shown to produce metastabilities, system crashes, and emergent structures in ways that are yet only poorly understood. Meeting this exciting scientific challenge requires a combination of time series analysis, complexity theory, and simulation with the analytical tools that have been developed by game theory, as well as graph and matrix theories. We argue that this will help achieving a better integration of theory and data models and provide a better understanding of the potentials and risks of modern economic systems.

Suggested Citation

  • Frank Schweitzer & Giorgio Fagiolo & Didier Sornette & Fernando Vega-Redondo & Douglas R. White, "undated". "Economic Networks: What do we know and what do we need to know?," Working Papers CCSS-09-010, ETH Zurich, Chair of Systems Design.
  • Handle: RePEc:stz:wpaper:ccss-09-010
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pawe{l} Sieczka & Didier Sornette & Janusz A. Ho{l}yst, 2010. "The Lehman Brothers Effect and Bankruptcy Cascades," Papers 1002.1070, arXiv.org, revised Sep 2011.
    2. Rutledge, John, 2015. "Economics as energy framework: Complexity, turbulence, financial crises, and protectionism," Review of Financial Economics, Elsevier, vol. 25(C), pages 10-18.
    3. Tabak, Benjamin M. & Takami, Marcelo & Rocha, Jadson M.C. & Cajueiro, Daniel O. & Souza, Sergio R.S., 2014. "Directed clustering coefficient as a measure of systemic risk in complex banking networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 394(C), pages 211-216.
    4. Michele Bernasconi & Matteo Galizzi, 2010. "Network formation in repeated interactions: experimental evidence on dynamic behaviour," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 9(2), pages 193-228, December.
    5. Lapatinas, Athanasios & Garas, Antonios, 2016. "The role of networks in firms’ multi-characteristics competition and market-share inequality," MPRA Paper 68959, University Library of Munich, Germany.
    6. Irena Vodenska & Alexander P. Becker & Di Zhou & Dror Y. Kenett & H. Eugene Stanley & Shlomo Havlin, 2016. "Community Analysis of Global Financial Markets," Risks, MDPI, Open Access Journal, vol. 4(2), pages 1-15, May.
    7. Brendan Markey-Towler & John Foster, 2013. "Understanding the causes of income inequality in complex economic systems," Discussion Papers Series 478, School of Economics, University of Queensland, Australia.
    8. Andreas Koulouris & Ioannis Katerelos & Theodore Tsekeris, 2013. "Multi-Equilibria Regulation Agent-Based Model of Opinion Dynamics in Social Networks," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 11(1), pages 51-70.
    9. Leonidas Sandoval Junior, 2014. "Dynamics in two networks based on stocks of the US stock market," Papers 1408.1728, arXiv.org, revised Aug 2014.
    10. Garas, Antonios & Lapatinas, Athanasios & Poulios, Konstantinos, 2015. "The complex-network based relation between migration and FDI in the OECD," MPRA Paper 68341, University Library of Munich, Germany.
    11. Andrey Sokolov & Rachel Webster & Andrew Melatos & Tien Kieu, 2012. "Loan and nonloan flows in the Australian interbank network," Papers 1202.3182, arXiv.org.
    12. Christos Ellinas & Neil Allan & Caroline Coombe, 2018. "Evaluating the role of risk networks on risk identification, classification and emergence," Papers 1801.05759, arXiv.org.
    13. Rainer Andergassen & Franco Nardini & Massimo Ricottilli, 2015. "Emergence and Resilience in a Model of Innovation and Network Formation," Networks and Spatial Economics, Springer, vol. 15(2), pages 293-311, June.

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