Mitigating cascades in sandpile models: an immunization strategy for systemic risk?

Antonio Scala, Vinko Zlatić, Guido Caldarelli, Gregorio D’Agostino

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

We use a simple model of distress propagation (the sandpile model) to show how financial systems are naturally subject to the risk of systemic failures. Taking into account possible network structures among financial institutions, we investigate if simple policies can limit financial distress propagation to avoid system-wide crises, i.e. to dampen systemic risk. We therefore compare different immunization policies (i.e. targeted helps to financial institutions) and find that the information coming from the network topology allows to mitigate systemic cascades by targeting just few institutions.
Original languageEnglish
Pages (from-to)2017 - 2023
Number of pages7
JournalEuropean Physical Journal: Special Topics
Volume225
Issue number10
DOIs
Publication statusPublished - 1 Oct 2016

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All Science Journal Classification (ASJC) codes

  • Materials Science(all)
  • Physics and Astronomy(all)
  • Physical and Theoretical Chemistry

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