We study the evolutionary dynamics of a discrete-time continuous-opinion model under bounded confidence in a complete network with random meetings when different types of agents are present, i.e. regular, stubborn and insincere. We find the following. Even though the decision-making succumbs...

We propose a network-based structural model of credit risk to demonstrate how idiosyncratic and systemic shocks propagate across the banking system and evaluate the costs. The banking system is built as a network of heterogeneous banks which are connected with one another. In such a system,...

The paper provides methodologically new approach to pricing CDS, predicated on the banking network and the banks' balance sheets. The model is evolutionary and includes a counterparty risk and the central bank bailout policy. The banking network is used to accurately calculate the capital ratio...

The paper is an examination of the interaction-based approach in economics and finance. The economy is considered a complex adaptive system that consists of a large number of interacting units who are represented as software bits of data and the rules of conduct. Heterogeneity, evolution,...

We study the stability of the banking system after a mortgage shock when a discretionary bailout policy is applied. Results suggest that the authority should be focused on preventing contagion. The decision over the appropriate policy depends upon the goal which the authority wants to pursue....

We propose a network-based model of credit contagion and examine the e�ects of idiosyncratic and systemic shocks to individual banks and the banking system. The banking system is built as a network in which banks are connected to each other through the interbank market. The microstructure...