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Ecosystems perspective on financial networks: diagnostic tools

The economical world consists of a highly interconnected and interdependent network of firms. Here we develop temporal and structural network tools to analyze the state of the economy. Our analysis indicates that a strong clustering can be a warning sign. Reduction in diversity, which was an essential aspect of the dynamics surrounding the crash in 2008, is seen as a key emergent feature arising naturally from the evolutionary and adaptive dynamics inherent to the financial markets. Similarly, collusion amongst construction firms in a number of regions in Japan in the 2000s can be identified with the formation of clusters of anomalous highly connected companies.

 

Ecosystems perspective on financial networks: diagnostic tools

Eduardo Viegas, Misako Takayasu, Wataru Miura, Koutarou Tamura, Takaaki Ohnishi, Hideki Takayasu, Henrik Jeldtoft Jensen

http://arxiv.org/abs/1301.5821

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On reverse engineering in the cognitive and brain sciences - Springer

On reverse engineering in the cognitive and brain sciences - Springer | Papers | Scoop.it

Various research initiatives try to utilize the operational principles of organisms and brains to develop alternative, biologically inspired computing paradigms and artificial cognitive systems. This article reviews key features of the standard method applied to complexity in the cognitive and brain sciences, i.e. decompositional analysis or reverse engineering. The indisputable complexity of brain and mind raise the issue of whether they can be understood by applying the standard method. Actually, recent findings in the experimental and theoretical fields, question central assumptions and hypotheses made for reverse engineering. Using the modeling relation as analyzed by Robert Rosen, the scientific analysis method itself is made a subject of discussion. It is concluded that the fundamental assumption of cognitive science, i.e. complex cognitive systems can be analyzed, understood and duplicated by reverse engineering, must be abandoned. Implications for investigations of organisms and behavior as well as for engineering artificial cognitive systems are discussed.

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