Modern ICT (Information and Communication Technology) has developed a vision where the "computer" is no longer associated with the concept of a single device or a network of devices, but rather the entirety of situated services originating in a digital world, which are perceived through the physical world. It is observed that services with explicit user input and output are becoming to be replaced by a computing landscape sensing the physical world via a huge variety of sensors, and controlling it via a plethora of actuators. The nature and appearance of computing devices is changing to be hidden in the fabric of everyday life, invisibly networked, and omnipresent, with applications greatly being based on the notions of context and knowledge. Interaction with such globe spanning, modern ICT systems will presumably be more implicit, at the periphery of human attention, rather than explicit, i.e. at the focus of human attention. Socio-inspired ICT assumes that future, globe scale ICT systems should be viewed as social systems. Such a view challenges research to identify and formalize the principles of interaction and adaptation in social systems, so as to be able to ground future ICT systems on those principles. This position paper therefore is concerned with the intersection of social behaviour and modern ICT, creating or recreating social conventions and social contexts through the use of pervasive, globe-spanning, omnipresent and participative ICT. [more]

"In the next century, planet earth will don an electronic skin. It will use the Internet as a scaffold to support and transmit its sensations. This skin is already being stitched together. It consists of millions of embedded electronic measuring devices: thermostats, pressure gauges, pollution detectors, cameras, microphones, glucose sensors, EKGs, electroencephalographs. These will probe and monitor cities and endangered species, the atmosphere, our ships, highways and fleets of trucks, our conversations, our bodies--even our dreams ....What will the earth's new skin permit us to feel? How will we use its surges of sensation? For several years--maybe for a decade--there will be no central nervous system to manage this vast signaling network. Certainly there will be no central intelligence...some qualities of self-awareness will emerge once the Net is sensually enhanced. Sensuality is only one force pushing the Net toward intelligence". These statements are quoted by an interview by Cherry Murray, Dean of the Harvard School of Engineering and Applied Sciences and Professor of Physics. It is interesting to outline the timeliness and highly predicting power of these statements. In particular, we would like to point to the relevance of the question "What will the earth's new skin permit us to feel?" to the work we are going to discuss in this paper. There are many additional compelling questions, as for example: "How can the electronic earth's skin be made more resilient?"; "How can the earth's electronic skin be improved to better satisfy the need of our society?";"What can the science of complex systems contribute to this endeavour?" [more]

We perform an empirical study of the preferential attachment phenomenon in temporal networks and show that on the Web, networks follow a nonlinear preferential attachment model in which the exponent depends on the type of network considered. The classical preferential attachment model for networks by Barab\'asi and Albert (1999) assumes a linear relationship between the number of neighbors of a node in a network and the probability of attachment. Although this assumption is widely made in Web Science and related fields, the underlying linearity is rarely measured. To fill this gap, this paper performs an empirical longitudinal (time-based) study on forty-seven diverse Web network datasets from seven network categories and including directed, undirected and bipartite networks. We show that contrary to the usual assumption, preferential attachment is nonlinear in the networks under consideration. Furthermore, we observe that the deviation from linearity is dependent on the type of network, giving sublinear attachment in certain types of networks, and superlinear attachment in others. Thus, we introduce the preferential attachment exponent $\beta$ as a novel numerical network measure that can be used to discriminate different types of networks. We propose explanations for the behavior of that network measure, based on the mechanisms that underly the growth of the network in question. [more]

The current economic crisis has provoked an active response from the interdisciplinary scientific community. As a result many papers suggesting what can be improved in understanding of the complex socio-economics systems were published. Some of the most prominent papers on the topic include (Bouchaud, 2009; Farmer and Foley, 2009; Farmer et al, 2012; Helbing, 2010; Pietronero, 2008). These papers share the idea that agent-based modeling is essential for the better understanding of the complex socio-economic systems and consequently better policy making. Yet in order for an agent-based model to be useful it should also be analytically tractable, possess a macroscopic treatment (Cristelli et al, 2012). In this work we shed a new light on our research group's contributions towards understanding of the correspondence between the inter-individual interactions and collective behavior. We also provide some new insights into the implications of the global and local interactions, the leadership and the predator-prey interactions in the complex socio-economic systems. [more]

We have analyzed the risks of possible development of bubbles in the Swiss residential real estate market. The data employed in this work has been collected by comparis.ch, and carefully cleaned from duplicate records through a procedure based on supervised machine learning methods. The study uses the log periodic power law (LPPL) bubble model to analyze the development of asking prices of residential properties in all Swiss districts between 2005 and 2013. The results suggest that there are 11 critical districts that exhibit signatures of bubbles, and seven districts where bubbles have already burst. Despite these strong signatures, it is argued that, based on the current economic environment, a soft landing rather than a severe crash is expected. [more]

Excessive leverage, i.e. the abuse of debt financing, is considered one of the primary factors in the default of financial institutions. Systemic risk results from correlations between individual default probabilities that cannot be considered independent. Based on the structural framework by Merton (1974), we discuss a model in which these correlations arise from overlaps in banks' portfolios. Portfolio diversification is used as a strategy to mitigate losses from investments in risky projects. We calculate an optimal level of diversification that has to be reached for a given level of excessive leverage to still mitigate an increase in systemic risk. In our model, this optimal diversification further depends on the market size and the market conditions (e.g. volatility). It allows to distinguish between a safe regime, in which excessive leverage does not result in an increase of systemic risk, and a risky regime, in which excessive leverage cannot be mitigated leading to an increased systemic risk. Our results are of relevance for financial regulators. [more]

Do scientists follow hot topics in their scientific investigations? In this paper, by performing analysis to papers published in the American Physical Society (APS) Physical Review journals, it is found that papers are more likely to be attracted by hot fields, where the hotness of a field is measured by the number of papers belonging to the field. This indicates that scientists generally do follow hot topics. However, there are qualitative differences among scientists from various countries, among research works regarding different number of authors, different number of affiliations and different number of references. These observations could be valuable for policy makers when deciding research funding and also for individual researchers when searching for scientific projects. [more]

Complex networks of real-world systems are believed to be controlled by common phenomena, producing structures far from regular or random. These include scale-free degree distributions, small-world structure and assortative mixing by degree, which are also the properties captured by different random graph models proposed in the literature. However, many (non-social) real-world networks are in fact disassortative by degree. Thus, we here propose a simple evolving model that generates networks with most common properties of real-world networks including degree disassortativity. Furthermore, the model has a natural interpretation for citation networks with different practical applications. [more]

We report evidence that empirical data show time varying multifractal properties. This is obtained by comparing empirical observations of the weighted generalised Hurst exponent (wGHE) with time series simulated via Multifractal Random Walk (MRW) by Bacry \textit{et al.} [\textit{E.Bacry, J.Delour and J.Muzy, Phys.Rev.E \,{\bf 64} 026103, 2001}]. While dynamical wGHE computed on synthetic MRW series is consistent with a scenario where multifractality is constant over time, fluctuations in the dynamical wGHE observed in empirical data fail to be in agreement with a MRW with constant intermittency parameter. This is a strong argument to claim that observed variations of multifractality in financial time series are to be ascribed to a structural breakdown in the temporal covariance structure of stock returns series. As a consequence, multi fractal models with a constant intermittency parameter may not always be satisfactory in reproducing financial market behaviour. [more]

Our goal in this paper is to study the market impact in a market in which the order flow is autocorrelated. We build a model which explains qualitatively and quantitatively the empirical facts observed so far concerning market impact. We define different notions of market impact, and show how they lead to the different price paths observed in the literature. For each one, under the assumption of perfect competition and information, we derive and explain the relationships between the correlations in the order flow, the shape of the market impact function while a meta-order is being executed, and the expected price after the completion. We also derive an expression for the decay of market impact after a trade, and show how it can result in a better liquidation strategy for an informed trader. We show how, in spite of auto-correlation in order-flow, prices can be martingales, and how price manipulation is ruled out even though the bare impact function is concave. We finally assess the cost of market impact and try to make a step towards optimal strategies. [more]