Why Free Markets Die: An Evolutionary Perspective

Company mergers and acquisitions are often perceived to act as catalysts for corporate growth in free markets systems: it is conventional wisdom that those activities lead to better and more efficient markets. However, the broad adoption of this perception into corporate strategy is prone to result in a less diverse and more unstable environment, dominated by either very large or very small niche entities. We show here that ancestry, i.e. the cumulative history of mergers, is the key characteristic that encapsulates the diverse range of drivers behind mergers and acquisitions, across a range of industries and geographies. A long-term growth analysis reveals that entities which have been party to fewer mergers tend to grow faster than more highly acquisitive businesses. Link to original publication:...

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Entangled communities and spatial synchronization lead to criticality in urban traffic

Giovanni Petri, Paul Expert, Henrik J. Jensen, John W. Polak, 2013, Scientific Reports, vol. 3 Link to the original publication

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Ecosystems perspective on financial networks: Diagnostic tools

E. Viegas, M. Takayasu, W. Miura, K. Tamura, T. Ohnishi, H. Takayasu, H. J. Jensen, 2013, Complexity, DOI:10.1002/cplx.21452. Link to the original publication The world economy consists of highly interconnected and interdependent commercial and financial networks. Here, we develop temporal and structural network tools to analyze the state of the economy and the financial markets. 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 financial markets crisis of 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...

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Line graphs, link partitions, and overlapping communities

T. Evans, R. Lambiotte, 2009, Physical Review E, vol. 80, no. 1 Link to the original publication In this paper, we use a partition of the links of a network in order to uncover its community structure. This approach allows for communities to overlap at nodes, so that nodes may be in more than one community. We do this by making a node partition of the line graph of the original network. In this way we show that any algorithm which produces a partition of nodes can be used to produce a partition of links. We discuss the role of the degree heterogeneity and propose a weighted version of the line graph in order to account for this. Comment: 9 pages, 7 figures. Version 2 includes minor changes to text and references and some improved...

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Line graphs of weighted networks for overlapping communities

T. S. Evans, R. Lambiotte, 2010, The European Physical Journal B, vol. 77, no. 2, pp. 265-272 Link to the original publication In this paper, we develop the idea to partition the edges of a weighted graph in order to uncover overlapping communities of its nodes. Our approach is based on the construction of different types of weighted line graphs, i.e. graphs whose nodes are the links of the original graph, that encapsulate differently the relations between the edges. Weighted line graphs are argued to provide an alternative, valuable representation of the system’s topology, and are shown to have important applications in community detection, as the usual node partition of a line graph naturally leads to an edge partition of the original graph. This identification allows us to use traditional partitioning methods in order to address the long-standing problem of the detection of overlapping communities. We apply it to the analysis of different social and geographical...

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