50 Years of the Great Journal Networks and a Video

 In 2021, we are marking the 50th anniversary of the great journal - Networks, which is truly a landmark anniversary! In order to celebrate this anniversary appropriately, the Co-Editors Bruce Golden and Doug Shier took the great initiative of editing a special issue of the journal, in Parts 1 and 2.

I am thrilled and absolutely delighted that Part 1 has now been published and is the first issue of the January 2021 volume.  In it, I am greatly honored to have my paper, which was written following an invitation from the Co-Editors that I could not refuse.

My paper, "Networks in economics and finance in Networks and beyond: A half century retrospective," traces and synthesizes the significant contributions to this area in papers published in this journal and in other journals and books. Yes, I pored through all the papers in the journal since its inception and to emphasize the "beyond" part - I went as far back as 1758! It was also important to incorporate relevant more recent contributions from the Network Science community.

A preprint of my paper can be downloaded here. 

Also, the Co-Editors organizes a special session at the recent INFORMS Annual Meeting this year, which was virtual because of the pandemic and several of the contributors to the special volume spoke.

Below is a photo of us!

The slide deck of my INFORMS presentation can be downloaded here.

The video of my presentation can be viewed here.

Congratulations to Networks on its 50th Anniversary and thanks to all the Editors over the years and to the authors as well as to the reviewers of many articles! Wishing the journal and researchers on networks many more successful years and research discoveries!

Once Part 2 of the special issue of Networks dedicated to the 50th Anniversary is posted online by the publisher Wiley, I will be providing a link to it on this blogpost.

Great Academic Experiences in London

I returned from London, which was extra busy in preparation for the Queen's 90th birthday celebrations this weekend,  to Oxford via train in the late afternoon today.

We had left for London on Wednesday afternoon since I was to give the presentation: Supply Chain Networks Against Time: From Food to Pharma, at the Centre for Transport Studies at Imperial College on Thursday afternoon. I was invited to speak by Dr Panagiotis Angeloudis, Senior Lecturer in Engineering Systems and Logistics and the Director, Port Operations Research & Technology Centre. Professor Angeloudis has done fascinating work on critical infrastructure resilience, construction logistics, as well as maritime transport, including a recent game theory model which was just published in Transportation Research B. He is supervising 9 PhD students and has 3 postdocs working for him - very impressive - and is a computer geek with a lot of skills in data visualization.

When I arrived in London, I checked my email messages, and found a message from a reporter from Waterloo, Canada, Jeff Outhit, requesting an interview with me on ransomware and cyberattacks. He needed a response quickly and we managed to correspond and the great article that he wrote was published. The title is: "Cyber ransoms are ‘fastest-growing threat,’ expert warns." Outhit had seen that I gave a keynote talk at the University of Waterloo on cybercrime and cybersecurity on April 15, 2016 on Analytics Day. That great conference was organized by my INFORMS colleague, Dr. Fatma Gzara, whom I thank in my presentation, which Outhit even linked to in his article.

Since the hotel I was staying at was close to Hyde Park the morning of my presentation I had to take a walk there since I just love the green spaces.

I was treated to a delicious lunch in a beautiful building before my talk with both Professor Angeloudis and Professor Washington Y. Ochieng, the Head of the Centre for Transport Studies, who is very dynamic and a great intellectual force and leader, whom I enjoyed speaking with very much. 

The audience for my talk, which was on June 9, 2016, consisted of students, postdocs, and also representatives from industry, including from data science, which was very neat. 

I also had a great surprise: Professor Ben Heydecker, a transportation professor from the University of College London, whom I had not seen for a long time, but with whom I have very pleasant memories, which included even conversations with my dissertation advisor at Brown University, Professor Stella Dafermos, at various conferences, came to my talk. 

Of course, we had to talk about the book by such dear colleagues as Professors David E, Boyce and Huw Williams,  Forecasting Urban Travel, whose book launch I was a panelist at last Fall at Northwestern University.

I enjoyed giving my presentation very much since the audience was very attentive and afterwards they also asked great questions. We continued the discussions for about an hour after my presentation, which was delightful.

The conversations with Professor Panagiotis Angeloudis were also much too short - from drones for disaster relief and delivery of medicines to ancient Roman supply chains - this is a must to explore  research and tools by an archeologist at Stanford, which I could very much relate to because, as a Visiting Fellow now at All Souls College at Oxford University, I interact not only with economists, mathematicians, and scientists but also with humanists and archeologists!

And, yesterday evening, after a very pleasant seminar and discussions - Professor Panagiotis' group reminds me of the United Nations - with students from different countries working so well together - my family and I were hosted by Dr. Stavros Siokos, a former doctoral student of mine, with whom I wrote the Financial Networks book. Dr. Siokos is a financier based in London and has a PhD in Industrial Engineering from UMass Amherst and I was his dissertation advisor. He is also a Center Associate of the Virtual Center for Supernetworks at the Isenberg School of Management, which I founded almost 15 years ago!

Stavros took us to an exclusive club for dinner - the Royal Automobile Club (RAC), where the ambience was extraordinary as was the food and service, but, best of all, were the conversations with a former student of mine, who has achieved great success in industry. We discussed even the possibility of Brexit, that is, England leaving the European Union, with the vote taking place on June 23, 2016. This would be disastrous for numerous reasons, including for research and science, which is not even much written about.  The possibility of Brexit as well as Trump are major topics of conversation among the Fellows at All Souls College at Oxford University.

It is quite the experience living in England during this very historic time.

Below are some photos, including several of the desserts eaten at the exquisite dinner, last night.

Thanks to both Professor Panagiotis Andeloudis and to Dr. Stavros Siokos for such fabulous experiences in London!

We ended the evening with a walk to Stavros' office which had been Eisenhower's office when he planned D-Day, got to see the home of the richest man in England, and saw St. James Park, as well.

Cybersecurity and Financial Services and Prescriptive Analytics

Yesterday, I had the honor of speaking on Cybersecurity and Financial Services at the INFORMS Analytics Conference in Boston. The conference was very well-organized, the venue at the Westin Waterfront hotel was marvelous, and the speakers came from both industry (many of the top analytics firms as developers and/or users were there) and academia. Also, there were many students and even a good-sized cohot from our UMass Amherst INFORMS Student Chapter, which I highlighted in one of my posts.

I had multiple roles at this conference, which made the experience extra rewarding, and INFORMS staff presented me with the nice streamers below.

My talk was in the Prescriptive Analytics track, which was appropriate, and Dr. Marius Solomon of Northeastern University introduced me. I have known Marius for many years through the Transportation & Logistics Society of INFORMS. He shared with me that there were 104 submissions for presentations and out of these 30 were selected. I had carefully thought about the topics that I would like to speak on and chose Cybersecurity and Financial Services since I believe that cybersecurity is a topic that could greatly benefit from analytics and operations research methodologies and the wonderful geeks and brainiacs in our professional community for whom tough problems are both challenging and enticing!

It was great to have Dr. Irv Lustig of IBM  in the audience and some of you may know that Irv was also an Applied Math major at Brown University and I was his TA for an operations research  course taught there by my dissertation advisor Professor Stella Dafermos. Irv is well-known at INFORMS and very active in its Certified Analytics Professional program.   I posted a photo of Irv and me in my previous blogpost. 

Irv asked good questions, but, then again, he has had an outstanding education (his doctoral dissertation advisor at Stanford was Professor George Dantzig, one of the founders of Operations Research). And we continued the discussion after my presentation. Great to hear that IBM is also interested in Financial Networks!

In my presentation I spoke about a project that was funded by the Advanced Cyber Security Center (ACSC) and then segued into our NSF project.

My full presentation, in pdf format, can be downloaded from the Supernetworks Center website.

In the presentation I highlighted a network model that we developed to assess financial network vulnerability and importance of different financial network components, described a network economic model of cyber crime, and also discussed our latest NSF project on envisioning a Future Internet Architecture that we are calling ChoiceNet. Imagine if we could enhance the resilience of the network through redesign.

Thanks to INFORMS for organizing such a fabulous analytics conference!

2013 Nobel Laureates in Economic Sciences -- Reflections and Connections

This time of the year is when the Nobel Prizes get announced (and it is also the time of the year when several of our major conferences take place including the INFORMS one) so there is a lot of anticipation, drama, and excitement.

The 2013 recipients of the Nobel Prize in Economic Sciences are: Professors Eugene Fama and Lars Peter Hansen of the University of Chicago and Professor Robert Shiller of Yale. They are receiving the Nobel prize "for their empirical analysis of asset prices."

Photo courtesy of TT/Claudio Bresciani/AP Bloomberg.com

What continues to amaze me is the connections between economic sciences, including computational economics,  and operations research and the management sciences, over the span of Nobel Prize recipients  in Economic Sciences. The first Nobel Prize in Economic Sciences was given back in 1969 and the full list of recipients (one female to-date, Elinor Ostrom) can be found here on the official Nobel site.

For example, Eugene Fama has published in Management Science: "Three Asset Cash Balance and Dynamic Portfolio Problems." Gary D. Eppen and Eugene F. Fama; Management Science, 1971, 17(5, Theory Series), pp. 311-19.http://links.jstor.org/sici?sici=0025-1909%28197101%2917%3A5%3C311%3ATACBAD%3E2.0.CO%3B2-Y

Also I cited Fama's work in my Financial Networks book, co-authored with a former doctoral student of mine, Stavros Siokos, who actually received his PhD from UMass Amherst in Industrial Engineering and Operations Research and is an extremely successful financier, based in London. We cite Fama's work in the ninth chapter.

As for Lars Peter Hansen, I crossed paths with him back in 2010, when he, Professor Andrew Lo of MIT, and David Marshall organized the Measuring Systemic Risk Conference, which took place in December in Chicago. I spoke on Financial Networks and I acknowledged Hansen on the second page of my talk. Joining me was my wonderful colleague in Finance, who was Professor Lo's doctoral student at MIT, Mila Getmansky Sherman.

Professor Shiller I have never met but I have met his colleague, Karl Case, and have written about their joint work and about NSF and entrepreneurship on this blog.

As for the only female Nobel laureate in Economic Sciences, I will never forget meeting Dr. Elinor Ostrom, when she spoke at UMass Amherst and I brought one of my PhD students with me, who is now Dr. Min Yu. Elinor would visit and work closely with my colleagues at the School of Business, Economics and Law at the University of Gothenburg in Sweden where I have held  a Visiting Professorship.

Along with Professor Hans Amman, I have coedited the Advances in Computational Economics book series (started with Kluwer and now with Springer) and the Nobel laureate, Daniel McFadden, was on our editorial board even before he received the Nobel Prize and I have dined with him at one of our Computational Economics conferences. Chris Sims and Tom Sargent I also met at a Computational Economics conference.  My first book, Network Economics: A Variational Inequality Approach, was the first book in the Advances in Computational Economics book series and it continues to be my most highly-cited work. Its second edition came out in 1999.

And, of course, who can ever forget meeting Paul Samuelson, whose work I have cited since I was a doctoral student at Brown University. As for the Nobel laureate Harry Markowitz, whose work in portfolio optimization I have cited numerous times, I met him at an INFORMS conference in an elevator -- he is over a foot taller than I am!

My INFORMS colleague and fellow blogger. Professor Mike Trick of CMU, wrote last year on Shapley and Roth receiving the Nobel in Economic Sciences and connections to operations research and the management sciences.

Financial Networks -- Special Issue of Computational Management Science

I received a lovely message the other day from a Springer editor which said:

Dear Anna,

I just received my copy of the special issue on “Financial Networks” of Computational Management Science. I am impressed by the excellent outcome, and I would like to thank you very much for this outstanding piece of work. I am definitely convinced that this special issue will help the journal in its positive development and in the task to position itself as a journal of superior quality.

Once more my compliments and thankfulness for your collaboration.

With best wishes,

Christian

Christian Rauscher

Springer

Senior Editor, Business/Economics

How very thoughtful and how much appreciated was the above message. And I do concur, I think that the special issue is really great and below I display the cover of the journal double volume.

 

My editorial on this special issue can be accessed here. The list of papers and abstracts can be found here. What I especially like about this double volume is that it includes papers by both practitioners and academics and it is so nice to see that research on Financial Networks is continuing to fascinate!

As we say in academia, it may take a while, but good research rises to the top!

Google Scholar -- The Swedes Made Me Do it and Why It Is Worth It

Readers of my blog know how much I LOVED being a Visiting Professor at the School of Business, Economics and Law at the University of Gothenburg, Sweden, where I spent several months last year, as part of my sabbatical.

I seem to get my "muse" in Europe and, especially, in Sweden, where I have written several books. Perhaps it is due to the culture, the beauty, the people, the history, quality of life, the food, and the history. Also, it does not hurt, that Gothenburg (Goteborg in Swedish) was voted in the top 15 most inventive cities in the world, based on the number of patents granted per population -- two other cities in Sweden -- Stockholm and Malmo -- also made this list (as did Boston in good old Massachusetts, which also made me happy). Eindhoven in The Netherlands was tops.

I heard from one of my wonderful colleagues in Gothenburg this morning, Professor Jonas Floden, and that inspired me to write this post that I have been ruminating on for a while.

Last summer, while in Gothenburg, I received the following message from my senior, fabulous colleague, Professor Johan Woxenius:

Dear all,

As part of the evaluation of the transport research we do together with Chalmers, from which you are funded, we use our librarians to analyse our scientific outcome. We get info about your publications from the library´s database GUP, but to analyse citations we have chosen to use Google Scholar that is comparatively inclusive in its search for publications and citations.

In order to facilitate the librarians work but even more for you not having to manually submit all publications and citations in the yearly survey, all researchers need to register at Google Scholar. For instance, we want to follow the progress in our collective h-index and i10 index. That’s why I have send you an invitation through Google Scholar.

The registration process is very simple, but you need to check that your publications are really yours, that they are all there and if any are registered as different publications lowering your stats.

For me it was very simple due to my unusual name and that I keep rather good track of my publications, I think it was only one publication that was registered as two different. It might be a bit more toilsome if you have a very common name. Anyway, when I searched for your names, there were not many registered researchers with the same names.  

Personally, I find Google Scholar very useful and it is particularly interesting to see who cites my work and of course pleasant to receive alerts of new citations!

Please let me know when you have registered so I do not have to remind you.

So, I signed up for Google Scholar, and it is fun to see which of your publications are cited the most and also the trends. My books tend to be the most highly cited. 

Of course, there are other ways of tracking your publications, but this one is for free and, although there has been criticism levied, and there can be some "gaming" done, you do get a good idea of which of your publications are being cited. 

Also, it is interesting to see your h-index and i10-index and what surprised me is that quite a few faculty now include these "metrics" on their webpages and even cv's.

And, just this week, I found out, through Google Scholar alerts, that one of my papers written with Dr. June Dong, "Financial Networks and Optimally-Sized Portfolios," published in Computational Economics, has been cited in a patent granted to HP! The patent, System and Method for Selecting a Portfolio,  also cited a paper by Dr. Dorit Hochbaum, well-known in operations research -- how cool is this!

Two other papers of mine, also co-authored with females, Dr. June Dong, Dr. Pat Mokhtarian, and Dr. Tina Wakolbinger, and supported by an NSF grant, have also been cited in 3 other granted patents.

Building Supply Chain Relationships Through Game Theory and Social Networks

I was contacted by a journalist recently from "Down Under" who was writing an article for manufacturing executives to introduce game theory. He had read my blogpost on sustainable fashion supply chains and game theory and  was interested in the following:

Specifically, there's one thing I'd like your expertise on: So many people think "using game theory" in negotiations is simply a matter of being as hard-nosed as you can to get the best deal. And yes, sometimes that's the route to go. 

But how would you advise manufacturers to use game theory in supply chain negotiations if they're genuinely interested in a long-term relationship with a supplier? Is it okay to leave some value on the table now if you're fairly sure it will pay off later?

I was very impressed that this journalist had realized that elationships are extremely important in supply chains (and, I might add, also in financial networks -- just think of Canada vs. the US in terms of the financial crisis of 2008 and how banks handled transactions with customers).

Two papers of ours address the integration of social networks with supply chain networks:

Dynamic Supernetworks for the Integration of Social Networks and Supply Chains with Electronic Commerce: Modeling and Analysis of Buyer-Seller Relationships with Computations, Tina Wakolbinger and Anna Nagurney, Netnomics 6: (2004) pp 153-185.
http://supernet.isenberg.umass.edu/articles/socnetsupply.pdf
and
Financial Engineering of the Integration of Global Supply Chain Networks and Social Networks with Risk Management, Jose M. Cruz, Anna Nagurney, and Tina Wakolbinger, Naval Research Logistics 53: (2006) pp 674-696.
http://supernet.isenberg.umass.edu/articles/intsocsup.pdf

In these game theory supply chain studies we capture the relationship production cost associated with different agents (say, manufacturers and retailers) who are interacting,  the value of their relationships, as well as the risk incurred that is associated with transactions, with the latter depending on the relationship levels. For example, if the relationship level is high (that is, the relationship is strong) then the risk associated with the transaction would be lower. Thus, firms, by investing in relationships may lower their transaction costs as well as the risks.

And, as the journalist surmised, there is an underlying dynamics to such interactions between and among the various decision-makers in a supply chain.

Through our game theory math modeling and associated algorithms and computations we can trace the evolution of the relationships and product flows along with the incurred profits until a Nash equilibrium is achieved, which gives us the  equilibrium (optimal) product flows and relationship levels.

Dr. Jose Cruz, my co-author and former doctoral student at the Isenberg School of Management at UMass Amherst, has also assessed the vulnerability of supply chains based on our related work on relationships and supply chains:
http://link.springer.com/chapter/10.1007%2F978-1-84882-634-2_7

And, since I cannot resist, and the query and discussion arose because of our game theory work on sustainability, UConn, where Professor Jose Cruz teaches at the Business School, was named the #1 Coolest School by the Sierra Club -- quite amazing (UMass Amherst was #27 on the list). Some related work of his on sustainability, game theory, and dynamics of supply chains is:
 Dynamics of Supply Chain Networks with Corporate Social Responsibility through Integrated Environmental Decision-making
Jose M. Cruz,  European Journal of Operational Research 184: (2008) pp 1005-1031.

The 2013 Summer Edition of the Supernetwork Newsletter is Now Online

It has been a fabulous couple of months at the Virtual Center for Supernetworks at the Isenberg School of Management. We are pleased to report that the 2013 Summer edition of our newsletter, The Supernetwork Sentinel,  is now available online. It highlights the many professional activities of the Center's Associates.

In it, you will find find a summary of the AAAS Dynamics of Disasters Symposium that I organized and which took place in Boston, Massachusetts and highlights of contributing to a Dream Course on Engineered Systems at the University of Oklahoma and to a panel at The New York Times EnergyforTomorrow Conference in NYC that I spoke at. You will also find information on awards and other recognitions received by the Center Associates, who are based on 3 different continents,  and who provide a wide reach for our activities in research, education, and outreach on topics ranging from supply chains to innovations on the Internet to financial networks and even humanitarian logistics.

In the 2013 summer edition, we also have news on our latest publications and notable conference presentations around the globe.

Supernetworks are networks of networks and the associated methodologies and applications continue to grow.

All editions of The Supernetwork Sentinel  can be downloaded from The Virtual center for Supernetworks website.

Enjoy and thanks for your support!

Financial Networks Double Volume in Production

One always looks forward to seeing one's work in print -- whether a journal article, an essay, an OpEd, a Letter to the Editor, or a book!

As an Editor,  it is rewarding to see the efforts of many resulting in a complete and finalized publication!

Being invited to be a Guest Editor of a special issue of a journal on a theme is an honor and it is exciting when one sees the hard work of the contributors, who submitted their papers (and then revised them), and that of the reviewers, who made useful and constructive suggestions, coming to a conclusion.

Some special issues may languish (think of critical path analysis in project planning) since a delay by an author in terms of revising or of reviewers in terms of refereeing may delay the entire volume production. This is not fair to all those involved and I was so pleased to have everyone who contributed to the special double volume on Financial Networks of the journal Computational Management Science that  I guest edited to have been so professional in their timeliness and attention -- Thank you!

The good news is that the special double issue, which I have written about on this blog,  is now in production by the publisher Springer!

I received and approved the cover below.

Springer has now made my editorial on the special issue available online to readers.

The volume represents contributions from both academics and practitioners from several different countries. Given the financial crisis of the past several years of historic economic proportions I believe that the papers in this volume will have a long-lasting impact.

I will send out a message when the hard copies of the volume are available.

Until then, the articles are available individually in Online First Articles by Springer.

Financial Networks -- Putting a Special Issue to Bed

I have always been fascinated by networks from transportation and supply chains to electric power and the Internet.

Two decades ago, I began work on financial networks in a project that was funded through the USDA and involved Merritt Hughes (a UMass Amherst graduate alumna) and a former doctoral student of mine, who is now an award-winning Full Professor, Dr. June Dong.

Since a series of papers that we wrote I have periodically returned to the financial networks theme since I am a systems thinker and it is intriguing to see how money flows and to determine analogies between/among different network systems.

With Dr. Stavros Siokos, who was also a former PhD student of mine, and is now a renowned financier based in London, we wrote the book, Financial Networks: Statics and Dynamics, and it was published by Springer in 1997. In 2003, I edited the volume, Innovations in Financial and Economic Networks, and it was published by Edward Elgar Publishing.

The global economic and financial crisis of 2008 and 2009 brought further attention to financial networks, systemic risk, fragility and vulnerability issues, so our research (with now Dr. Patrick Qiang) also addressed the criticality of nodes and links (and their importance and ranking) in financial networks.

In 2008, I wrote a survey on financial networks which was published in the Handbook of Information Technology and Finance, edited by  D. Seese, C. Weinhard, and F. Schlottmann.

Invitations to speak on Financial Networks at conferences, including the Measuring Systemic Risk Conference at the University of Chicago in 2010, demonstrated the growing interest in viewing financial issues, problems, and relationships through a network prism with a focus on the system. Although those of us in operations research and the management sciences as well as in economics had realized this, the finance community was slower to recognize this.

So, when the invitation from the Editor of the journal, Computational Management Science, Professor Berc Rustem, came last Spring, to guest edit a special issue on Financial Networks, I agreed, and the call for papers went out with a deadline for submission of July 15, 2013.

I am pleased to report that the edited volume is now being "put to bed." The collection consists of 8 peer-reviewed papers, plus my editorial. The contributions are from academics and practitioners and cover such timely topics as stock market graphs with applications to the US stock market, Russia, and Sweden; financial contagion, dynamic network formation using game theory, financial network equilibria and corporate social responsibility as well as the co-evolution of supply chains and corporate financial networks with insolvency risk. Methodological approaches in the formulation, analysis, and computations include network and graph theory, statistics, game theory, and variational inequality theory.

I will let my readers know when the volume is published -- it will be a double volume and, in the meantime, you can find and read some of the preprints already in the Online First Articles.

Reviewers are essential to the quality of papers and I am so grateful to all those, who, although they remain anonymous, contributed so much with their helpful comments and suggestions to the authors on their original manuscripts and their subsequent  revisions.

Medical Operations Research and More

What an amazing week it has been!

Last Friday, at UMass Amherst, several of my colleagues and I from the Isenberg School spoke at a Risk Management and Optimization Workshop, as part of a new funded project that we are researching through the UMass Innovation Institute. My presentation was on Networks, Performance Assessment, and Vulnerability Analysis, and, given the recent power outages in Boston, which affected even the Prudential Center, it was certainly timely.

Then, last Saturday, I flew to Gothenburg, Sweden, where I have been appointed a Visiting Professor. I just gave my fourth presentation since arriving at the School of Business, Economics and Law at the University of Gothenburg.

My presentation today was part of the Finance Seminar Series and I spoke on Financial Networks and Disruption Management. The audience was terrific and included faculty, postdocs, doctoral students, and even an Associate Dean, who I mistook for a student.

Next Tuesday, I will be giving a talk at the Chalmers University of Technology, which is also located in Gothenburg, Sweden.

According to the announcement, which is now posted, I will be speaking on Medical Operations Research. I think that the title got changed as the electrons crossed the Atlantic Ocean, but I do like it. The title of my presentation, however, is actually: Perishable Product Supply Chains in Health Care: Models, Analysis, and Computations.

In one week, and on opposite sides of the Atlantic, I will have given 5 talks and the one at Chalmers will make it 6. I am enjoying the questions and discussions tremendously.

In Glorious Gothenburg

I arrived yesterday in Gothenburg, Sweden with a short layover in London Heathrow.

Both flights on British Airways were packed but very comfortable although I had a middle seat on the first leg out of Boston Logan. I was seated next to a female going back to Ukraine who works in healthcare IT and another female PhD student who was off to Oslo to present at a history workshop.

My apartment is lovely and so quiet.

The city was teaming with life yesterday, a Sunday, and the cafes were packed.

I wandered for miles and found the School of Business, Economics and Law where I will be giving two talks today. The first will be to a class and the title is Financial Networks. I will be speaking on mergers and acquisitions and also providing an overview of financial networks.

I will also have the pleasure of introducing myself through a formal seminar. I will focus on international collaborations.

The sun is shining and new adventures are beginning.

Off to Sweden

My bags are packed and soon I will be off to Sweden.

I am very much looking forward to visiting the University of Gothenburg, where I will be giving seminars on financial networks, disruption management, and supply chain network analysis and design. I have been officially appointed a Visiting Professor of Operations Management at its School of Business, Economics and Law.

While in Gothenburg, I will also be speaking at the Chalmers University of Technology on perishable product supply chains with applications to healthcare.

I'll be writing about my experiences. The University is even providing me with a furnished apartment during my stay.

New adventures and intellectual experiences begin.

As the Swedes say "Skol!"

Networks and Operations Research, Patterns and Big Data -- So How Does Money and Traffic Flow?

We've heard about the new geography -- now we are hearing about the new mathematics and at the prestigious Goldman Sachs technology conference that took place recently in San Francisco.

There, as noted by Quentin Hardy, writing for The New York Times, Steve Mills, IBM's senior vice president for software and systems was quoted as saying that when it comes to algorithms, "If I can do a power grid, I can do water supply..." Even traffic, which like water and electricity has value when it flows effectively. Moreover, Mills is quoted as saying in terms of cross-pollination and finding commonalities and patterns with the help of big data and algorithms that we are now: "leveraging the cost structure of new mathematics."

When I read about flows and especially in the context of transportation, electric power grids, natural resources, and finance, of course, networks and operations research and even economics immediately come to my mind since I have been researching and writing about the topic for many years.

I have always been fascinated by the commonality among problems and find that networks and the associated methodologies, such as optimization theory, game theory, variational inequality theory, and projected dynamical systems, provide a captivating medium for visualization, analysis, and computation and a way of bridging disciplines.

In our research and publications, we were able to answer several open questions, raised over a half a century ago:

1. How does money flow -- does it flow like water or electricity (raised by Cohen in 1952).

2. How are electric power generations and distribution networks like transportation networks (raised by Beckmann, McGuire, and Winsten in their classic 1956 book, Studies in the Economics of Transportation).

You can see the answers to the above questions in our papers in Computational Management Science and Naval Research Logistics, respectively.

In addition, we established, through a supernetwork formalism, how supply chain network equilibrium problems could be reformulated and solved as transportation network equilibrium problems -- thereby, constructing a common conceptual, modeling, and algorithmic framework for these two important classes of problems. That paper, On the Relationship Between Supply Chain and Transportation Network Equilibria: A Supernetwork Equivalence with Computations, was published in Transportation Research E 42: (2006) pp 293-316.

I also have a synthesis of the above equivalences in my Supply Chain Network Economic: Dynamics of Prices, Flows, and Profits book, which was published in 2006 and written that glorious year when I was a Science Fellow at the Radcliffe Institute for Advanced Study at Harvard University.

For those of you who are interested in the history of networks, with a focus on financial networks, and which includes a reference to Cohen above, please see my presentation on Financial Networks delivered at the Workshop on Measuring Systemic Risk, courtesy of the Federal Reserve Bank of Chicago and the University of Chicago in December 2010.

What seems like new mathematics (as was the case also with the new geography) to some is that now a wider circle is coming to realize the importance of research that has been going on for quite a long time, with major innovations over decades (frankly, centuries). Yes, I think it is really cool when an algorithm I implemented for predicting urban traffic flows can also be used to predict product flows on supply chain networks or financial transactions. Even major corporations are starting to notice.

Financial Networks -- Special Issue of Computational Management Science

Last December I very much enjoyed speaking on Financial Networks at the Measuring Systemic Risk Conference, organized by Lars Peter Hansen of the University of Chicago, Andrew W. Lo of the Sloan School at the Massachusetts Institute of Technology, and David Marshall of the Federal Reserve Bank of Chicago.

I wrote about the conference in a blogpost entitled, Oprah was not there and neither was George Clooney but Chicago still Sparkled with Intellectual Brilliance.

Recently, I received an invitation from the editor of the journal, Computational Management Science, Dr. Berc Rustem of Imperial College, to edit a Special Issue on Financial Networks.

This invitation I also could not refuse.

Below is a Call for Papers, which will also be posted shortly on the journal website.

Call for Papers

Special Issue of Computational Management Science

Financial Networks

Guest Editor:

Anna Nagurney

Isenberg School of Management, University of Massachusetts Amherst

Areas of Interest

Networks are a powerful scientific framework for the modeling, analysis, and solution of complex economic, social, and management problems.

Financial networks, in particular, have evolved to become a theoretical and computational paradigm for a spectrum of decision-making problems from the micro to the macro levels, and ranging from portfolio optimization to systemic risk assessment, financial intermediation, contagion analysis, and even electronic finance.

This special issue of Computational Management Science seeks to capture the state-of-the-art of financial networks through high quality, original research papers that include numerical results.

Reviewing Information

The submitted papers will be peer-reviewed by anonymous reviewers according to the standards of a leading international journal.

Submission Information

The deadline for submission is July 15, 2012. Manuscripts must be written in English and conform to the style of the journal Computational Management Science and not exceed 25 pages.

Please submit manuscripts to:

http://www.editorialmanager.com/cmsc/

and select Article Type: S.I. Networks, to ensure proper processing.

If you have questions, the Guest Editor can be contacted at:

e-mail: nagurney@isenberg.umass.edu

Supernetwork Analytics -- Paying for the True Cost of Transportation and Negative Externalities

How many of us realize the true costs of the impact of our driving on others?

Of course, those of us who work on networks and transportation regularly compute costs of operating various systems (system-optimization) as opposed to figuring out which is the best route of travel from an origin to a destination (user-optimization). Typically, the costs that we consider in such applications reflect time or a monetarization of time and costs of fuel consumption and since the classical work of Beckmann, McGuire, and Winsten's (1956) book, "Studies in the Economics of Transportation," we also include congestion, which is a negative externality and what, in economics and beyond, refers to the negative impacts of one's activities.

Increasingly, we are also utilizing generalized costs, which, for example, can include other costs such as the emissions generated and many of us have worked on the price of anarchy, relevant to congested networks from transportation to the Internet.

What if there was a computerized financial and telecommunications system that could quantify the true cost of using our transportation networks? Such a system might actually provide a powerful feedback loop to alter individuals' driving behavior and might even motivate them to switch to more environmentally friendly modes of travel, such as public transportation, bicycles, or even one's feet.

While traveling recently in San Diego on, yes, 8 lane highways (each way), I was stunned by the passing on the right, on the left, but overall quite decent drivers although the wide spans of highways made me yearn for the northeast of the US (weather notwithstanding). There was limited public transit in sight and we spent 6 days there.

The Netherlands has begun an experiment, which demonstrates supernetworks (networks of networks) in action. Various vehicles, including cars, were installed with high technology to track vehicle movements in order to calculate not only the distance traveled, but also the fuel efficiency of the vehicle, the associated emissions, plus the expected "business" of the roads, as well as the wear and tear of the vehicle on the roads (very cool but more on this aspect later).

Other factors that I might include would be the number of passengers traveling (of course, the greater the number the greater impact on fuel consumption but a lightening of the congestion).

The New York Times reported on this experiment in a recent article, Netherlands Meter Plan Links Gas Pedals to Wallets, from Eindhoven, which, interestingly, is the location of a fellow research group on supernetworks, and our Virtual Center for Supernetworks is planning on hosting a visiting scholar from that group this Fall.

My research team has been working on sustainable transportation for many years now and in my Sustainable Transportation Networks book I describe many different policies to alleviate congestion and emission including marketable pollution permits, emission and congestion tolls, etc. The book is focused on transportation whereas our Environmental Networks book emphasizes models and algorithms to enhance sustainability on a macro scale.

Now for the clincher, as my students in transportation and logistics know, we can construct link tolls and they will always be nonnegative, but path tolls can be constructed that take on negative values (think of subsidies and one of my favorite ones is that children in strollers and their caretakers ride free on busses in Stockholm, Sweden, which I even took advantage of when we lived there with our daughter and the busses are so comfortable and handsome).

So, as someone who is extremely frustrated by the low quality of road infrastructure in the area of Massachusetts that I live in, would the government pay the vehicle operators for the wear and tear on their vehicles (plus their anatomies) if such a supernetwork system were to be installed in the US?

Infrastructure matters and with the right public and private partnerships we should be able to make the US a model for transportation and logistics but in whose lifetime?

Those Fascinating Financial and Social Networks

In 1997, I co-authored the book, Financial Networks: Statics and Dynamics, with Stavros Siokos, a former PhD student of mine, who has had a meteoric career in finance.

Since that book, my students, collaborators, and I have conducted a lot of research on this topic, and have advanced the state-of-the-art to include electronic finance within a network framework, financial networks with intermediation, financial risk and node and link vulnerability, and even the integration of financial networks with social networks.

Now, for the drumroll!

Speaking of the reality of social networks and financial networks, The New York Times has announced that the Deutsche Bank will be announcing its new leader this weekend, and, of the finalists. is Anshu Jain. Jain received an MBA from our School of Management at UMass Amherst (which I had mentioned in an earlier blogpost).

Plus, I heard today from one of my former colleagues at the Isenberg School of Management, Sheila Bair, who recently stepped down as the Chairwoman of the FDIC in Washington DC, and whose headship and leadership of that agency for 5 years has been heavily covered and lauded in the press. As of September 2011, she will begin her new position at The Pew Charitable Trusts in Washington DC.

You can read the interview with Ms. Bair conducted by Joe Nocera of The Times here.

My Student, the President

In 1997, I co-authored with Dr. Stavros Siokos, the book, Financial Networks: Statics and Dynamics, and financial networks are very hot now as both a topic in research and practice due to the financial crisis.

Dr. Siokos had been one of my doctoral students, and I had chaired his dissertation in Operations Research. I am a faculty member in the Isenberg School but have also supervised several doctoral dissertations in the College of Engineering, since I hold courtesy appointments in two departments there. Dr. Siokos is originally from Greece and he needed to complete his dissertation in the College of Engineering at UMass Amherst (rather than in Management Science) in order not to serve in the Greek army. The title of his dissertation was: International multi-sector, multi-instrument financial modeling and computation: Statics and dynamics, Department of Industrial Engineering and Operations Research, University of Massachusetts Amherst, 1998.

Together we had co-authored papers which had appeared in such journals as Networks and Annals of Operations Research.

He has had a meteoric career in finance and serves as a Center Associate of the Virtual Center for Supernetworks that I direct at the Isenberg School of Management.

Dr. Siokos has now been appointed President of Sciens Fund of Hedge Funds Management (which is a fund of funds) and had previously served as a non-executive member of Sciens. This reminds me of supernetwoks, which are "networks of networks."

Dr. Siokos served for many years as the Managing Director within the equities division of Citigroup in London, where he was Global Head of Alternative Execution Sales (program trading, algorithmic trading, Direct Market Access), Global Head of portfolio trading strategies as well as head of the company's pension funds and insurance companies equity structured solutions in Europe. He, since April 2008, until now, was the Deputy General Manager & Head of Asset management, Private Banking, Private Equity & Alternative Investments of Piraeus Bank in Athens, Greece. He has been top ranked in most of the major European Investment and Alternative Execution surveys in the quantitative services sector over the last nine years.

Several of my former doctoral students have achieved the rank of Full Professor as academics and I can now say that a former doctoral student of mine is now a President!

I could not be prouder and like to think that it is the methodologies that he learned and advanced in operations research and the management sciences that have enabled him to flourish in financial services at the global level and to be responsible for a fund worth billions of dollars.

Let's Build a Resilient Network Economy Through an Infrastructure Bank and Analytics

How far does our critical infrastructure have to crumble before we will take concerted, systemic action?

How many disasters do we have to observe and experience, from both near and far, before we move forward?

How many opportunities will we continue to miss in moving our people and goods more efficiently, in cleaning up our air and waterways, and in building the schools and health care resources that our citizens need and deserve?

How long do we wait before the latest research on network resiliency gets put into practice?

How many more people need to lose their jobs before we, as a country, move forward in a significant, constructive, and measurable way?

There is promise on the horizon.

In an editorial, published in today's New York Times, there is bipartisan support, led by Senators John Kerry, Democrat of Massachusetts, Kay Bailey Hutchison, Republican of Texas, and Mark Warner, Democrat of Virginia, to establish an infrastructure bank. According to the editorial: The bank would lend money to build big-ticket transportation, water and energy projects that have a clear public benefit. The loans, or loan guarantees, would be designed to attract private capital as well. In fact, at least half a project’s financing would have to come from the private sector. As much as $640 billion could be leveraged this way over the next decade, proponents say.

It is time for the United States of America to lead in creation of an economy through a critical infrastructure that is an example for all the world! And in doing so, let us take advantage of the latest research on network design, risk management, sustainability, through analytics, so that we repair what needs to be repaired; build what needs to be built and where, and create lasting jobs for a brighter and safer future for all!

And remember, let's acknowledge system risk and financial networks, this time around!

Oprah was not there and neither was George Clooney but Chicago still Sparkled with Intellectual Brilliance

It takes a special event to bring me to Chicago in the months of December and January.

When my students, colleagues, and neighbors heard that I had accepted an invitation to go to Chicago this past week they knew that it had to be something special. Of course, they all told me to say hello to Oprah. I did not want to disappoint them to tell them that she was south of the equator in Sydney, Australia, where the Sydney Opera House was renamed in her honor (for a few days) and she escaped the frigid weather of the north plus all the stranded plane, train, and automobile stories.

The event that brought me to Chicago was the Measuring Systemic Risk Conference that was co-hosted by the Milton Friedman Institute of the University of Chicago and the Federal Reserve Banks of Chicago and New York. This event, which I had written about prior to my departure, brought together academics, bankers, regulators, insurance execs, financiers, and other practitioners, who are deep, passionate thinkers to discuss financial crises and the most recent one, in particular. The conference program was fantastic.

I had the pleasure of serving on the Network Analysis panel on the first day of this conference and the discussions were so fascinating and stimulating that lunch was late. Joining me on the panel were: my colleague from the Finance and Operations Management Department at the Isenberg School, Mila Getmansky Sherman, who spoke on her recent financial network analysis paper with Lo and co-authors plus on system dynamics, Sujit Kapadia, of the Bank of England, who discussed his work there on financial analysis and networks with a focus on measurement, and Kimmo Soramaki, the founder of the company, Financial Network Analytics, who is also a fellow blogger. Soramaki (you may be able to guess from the name) is Finnish but he told me that he now lives in Barcelona. The panel was moderated by Nicholas Economides of NYU, who also spoke.

As Andrew Lo, of the Sloan School at MIT (who needs no introductions), stated when he asked all the participants to introduce themselves, the amount of brainpower in the room was extraordinary (and I would also add that this was one of the most interesting, warm, and engaging groups that I have ever been part of).

I left with new additions to my professional network and a wealth of interesting research ideas. It was also terrific to speak with Perry Mehrling of Columbia and BU, John Liechty of Penn State, Reena Aggarwal of Georgetown University, Sanjoy Mitter of MIT, and even John Birge of the Booth School of the University of Chicago was there (it was great to see him).

I congratulate Professors Lars Peter Hansen of the University of Chicago and Andrew Lo of MIT plus David Marshall of the Federal Reserve Bank of Chicago for a truly exceptional conference!

The conference presentations, additional readings, and event synopses of the discussions will be posted on the conference website, as they become available.

Above are photos taken at the conference venue, the Federal Reserve Bank of Chicago, and at O'Hare airport where I photographed a fantastic jazz band that was playing close to my departure gate, B9. I did not see George Clooney and although we ended up stuck on the tarmac on my United flight (the automatic brakes needed fixing) we eventually got "Up in the Air!" I made it back in time to proctor my undergraduate course final exam since, as torn as I was, I believe it very important to see my wonderful students at the end of the course and to wish them all the best.

I have posted my conference panel presentation on Financial Networks, which may be accessed here.

As for what I was doing in Chicago last January, I spoke at the Symposium on Transportation Network Design and Economics at Northwestern University, which was organized by Hani S. Mahmassani in honor of the visit of Martin Beckmann (another invitation that I could not refuse, although it took me about two weeks to defrost afterwards).