This paper shows how to reduce the bullwhip effect by introducing advance demand information (ADI) into the ordering schemes of supply chains. It quantifies the potential costs and benefits of ADI, and demonstrates that they are not evenly distributed across the chain. Therefore, market-based...

In the context of diffusion of innovations, we propose a probabilistic model based on interacting populations connected through new communication channels. The potential adopters are heterogeneous in the connectivity levels and in their taste for innovation. The proposed framework can model the...

We study a model of wealth dynamics (Physica A 282 (2000) 536) which mimics transactions among economic agents. The outcomes of the model are shown to depend strongly on the topological properties of the underlying transaction network. The extreme cases of a fully connected and a fully...

Motivated by the goal of finding a more accurate description of the empirically observed dynamics of financial fluctuations, we propose a stochastic process that yields three statistical properties: (i) short-range autocorrelations in the index changes, (ii) long-range correlations in the...

The proof of a theorem that allows one to construct deterministic evolution equations from a set, with two subsets, containing two types of discrete stochastic evolution equation is developed. One subset evolves Markovianly and the other non-Markovianly. As an illustrative example, the...

A necessary precondition for modeling financial markets is a complete understanding of their statistics, including dynamics. Distributions derived from nonextensive Tsallis statistics are closely connected with dynamics described by a nonlinear Fokker–Planck equation. The combination shows...

In financial markets, not only prices and returns can be considered as random variables, but also the waiting time between two transactions varies randomly. In the following, we analyse the statistical properties of General Electric stock prices, traded at NYSE, in October 1999. These properties...

The generation mechanisms of real world networks have been described using multiple models. The mathematical features of these models are usually extrapolated from statistical properties of a snapshot of these networks. We here propose an alternative method based on direct measurement of a...

The transient dynamics of interacting biological species extracted from two ecosystems is investigated. We model the environment interaction by a multiplicative noise and the temperature oscillations by a periodic forcing. We find noise-induced effects such as enhanced temporal oscillations,...