Commodity-specific triads in the Dutch inter-industry production network.

Triadic motifs are the smallest building blocks of higher-order interactions in complex networks and can be detected as over-occurrences with respect to null models with only pair-wise interactions. Recently, the motif structure of production networks has attracted attention in light of its possible role in the propagation of economic shocks. However, its characterization at the level of individual commodities is still poorly understood. Here we analyze both binary and weighted triadic motifs in the Dutch inter-industry production network disaggregated at the level of 187 commodity groups, which Statistics Netherlands reconstructed from National Accounts registers, surveys and known empirical data. We introduce appropriate null models that filter out node heterogeneity and the strong effects of link reciprocity and find that, while the aggregate network that overlays all products is characterized by a multitude of triadic motifs, most single-product layers feature no significant motif, and roughly 85% of the layers feature only two motifs or less. This result paves the way for identifying a simple 'triadic fingerprint' of each commodity and for reconstructing most product-specific networks from partial information in a pairwise fashion by controlling for their reciprocity structure. We discuss how these results can help statistical bureaus identify fine-grained information in structural analyses of interest for policymakers.

Deterministic, quenched, and annealed parameter estimation for heterogeneous network models.

At least two different approaches to define and solve statistical models for the analysis of economic systems exist: the typical, econometric one, interpreting the gravity model specification as the expected link weight of an arbitrary probability distribution, and the one rooted in statistical physics, constructing maximum-entropy distributions constrained to satisfy certain network properties. In a couple of recent companion papers, they have been successfully integrated within the framework induced by the constrained minimization of the Kullback-Leibler divergence: specifically, two broad classes of models have been devised, i.e., the integrated and conditional ones, defined by different, probabilistic rules to place links, load them with weights and turn them into proper, econometric prescriptions. Still, the recipes adopted by the two approaches to estimate the parameters entering into the definition of each model differ. In econometrics, a likelihood that decouples the binary and weighted parts of a model, treating a network as deterministic, is typically maximized; to restore its random character, two alternatives exist: either solving the likelihood maximization on each configuration of the ensemble and taking the average of the parameters afterwards or taking the average of the likelihood function and maximizing the latter one. The difference between these approaches lies in the order in which the operations of averaging and maximization are taken-a difference that is reminiscent of the quenched and annealed ways of averaging out the disorder in spin glasses. The results of the present contribution, devoted to comparing these recipes in the case of continuous, conditional network models, indicate that the annealed estimation recipe represents the best alternative to the deterministic one.

Local Phase Transitions in a Model of Multiplex Networks with Heterogeneous Degrees and Inter-Layer Coupling.

Multilayer networks represent multiple types of connections between the same set of nodes. Clearly, a multilayer description of a system adds value only if the multiplex does not merely consist of independent layers. In real-world multiplexes, it is expected that the observed inter-layer overlap may result partly from spurious correlations arising from the heterogeneity of nodes, and partly from true inter-layer dependencies. It is therefore important to consider rigorous ways to disentangle these two effects. In this paper, we introduce an unbiased maximum entropy model of multiplexes with controllable intra-layer node degrees and controllable inter-layer overlap. The model can be mapped to a generalized Ising model, where the combination of node heterogeneity and inter-layer coupling leads to the possibility of local phase transitions. In particular, we find that node heterogeneity favors the splitting of critical points characterizing different pairs of nodes, leading to link-specific phase transitions that may, in turn, increase the overlap. By quantifying how the overlap can be increased by increasing either the intra-layer node heterogeneity (spurious correlation) or the strength of the inter-layer coupling (true correlation), the model allows us to disentangle the two effects. As an application, we show that the empirical overlap observed in the International Trade Multiplex genuinely requires a nonzero inter-layer coupling in its modeling, as it is not merely a spurious result of the correlation between node degrees across different layers.

Reconstructing firm-level interactions in the Dutch input-output network from production constraints.

Recent crises have shown that the knowledge of the structure of input-output networks, at the firm level, is crucial when studying economic resilience from the microscopic point of view of firms that try to rewire their connections under supply and demand constraints. Unfortunately, empirical inter-firm network data are protected by confidentiality, hence rarely accessible. The available methods for network reconstruction from partial information treat all pairs of nodes as potentially interacting, thereby overestimating the rewiring capabilities of the system and the implied resilience. Here, we use two big data sets of transactions in the Netherlands to represent a large portion of the Dutch inter-firm network and document its properties. We, then, introduce a generalized maximum-entropy reconstruction method that preserves the production function of each firm in the data, i.e. the input and output flows of each node for each product type. We confirm that the new method becomes increasingly more reliable in reconstructing the empirical network as a finer product resolution is considered and can, therefore, be used as a realistic generative model of inter-firm networks with fine production constraints. Moreover, the likelihood of the model directly enumerates the number of alternative network configurations that leave each firm in its current production state, thereby estimating the reduction in the rewiring capability of the system implied by the observed input-output constraints.

Phiclust: a clusterability measure for single-cell transcriptomics reveals phenotypic subpopulations.

The ability to discover new cell phenotypes by unsupervised clustering of single-cell transcriptomes has revolutionized biology. Currently, there is no principled way to decide whether a cluster of cells contains meaningful subpopulations that should be further resolved. Here, we present phiclust (ϕclust), a clusterability measure derived from random matrix theory that can be used to identify cell clusters with non-random substructure, testably leading to the discovery of previously overlooked phenotypes.

Local stability properties of complex, species-rich soil food webs with functional block structure.

Ecologists have long debated the properties that confer stability to complex, species-rich ecological networks. Species-level soil food webs are large and structured networks of central importance to ecosystem functioning. Here, we conducted an analysis of the stability properties of an up-to-date set of theoretical soil food web models that account both for realistic levels of species richness and the most recent views on the topological structure (who is connected to whom) of these food webs. The stability of the network was best explained by two factors: strong correlations between interaction strengths and the blocked, nonrandom trophic structure of the web. These two factors could stabilize our model food webs even at the high levels of species richness that are typically found in soil, and that would make random systems very unstable. Also, the stability of our soil food webs is well-approximated by the cascade model. This result suggests that stability could emerge from the hierarchical structure of the functional organization of the web. Our study shows that under the assumption of equilibrium and small perturbations, theoretical soil food webs possess a topological structure that allows them to be complex yet more locally stable than their random counterpart. In particular, results strongly support the general hypothesis that the stability of rich and complex soil food webs is mostly driven by correlations in interaction strength and the organization of the soil food web into functional groups. The implication is that in real-world food web, any force disrupting the functional structure and distribution pattern of interaction strengths (i.e., energy fluxes) of the soil food webs will destabilize the dynamics of the system, leading to species extinction and major changes in the relative abundances of species.

Crowded Trades, Market Clustering, and Price Instability.

Crowded trades by similarly trading peers influence the dynamics of asset prices, possibly creating systemic risk. We propose a market clustering measure using granular trading data. For each stock, the clustering measure captures the degree of trading overlap among any two investors in that stock, based on a comparison with the expected crowding in a null model where trades are maximally random while still respecting the empirical heterogeneity of both stocks and investors. We investigate the effect of crowded trades on stock price stability and present evidence that market clustering has a causal effect on the properties of the tails of the stock return distribution, particularly the positive tail, even after controlling for commonly considered risk drivers. Reduced investor pool diversity could thus negatively affect stock price stability.

The ambiguity of nestedness under soft and hard constraints.

Many real networks feature the property of nestedness, i.e. the neighbours of nodes with a few connections are hierarchically nested within the neighbours of nodes with more connections. Despite the abstract simplicity of this notion, various mathematical definitions of nestedness have been proposed, sometimes giving contrasting results. Moreover, there is an ongoing debate on the statistical significance of nestedness, since random networks where the number of connections (degree) of each node is fixed to its empirical value are typically as nested as real ones. By using only ergodic and unbiased null models, we propose a clarification that exploits the recent finding that random networks where the degrees are enforced as hard constraints (microcanonical ensembles) are thermodynamically different from random networks where the degrees are enforced as soft constraints (canonical ensembles). Indeed, alternative definitions of nestedness can be negatively correlated in the microcanonical one, while being positively correlated in the canonical one. This result disentangles distinct notions of nestedness captured by different metrics and highlights the importance of making a principled choice between hard and soft constraints in null models of ecological networks.

Uncovering functional signature in neural systems via random matrix theory.

Neural systems are organized in a modular way, serving multiple functionalities. This multiplicity requires that both positive (e.g. excitatory, phase-coherent) and negative (e.g. inhibitory, phase-opposing) interactions take place across brain modules. Unfortunately, most methods to detect modules from time series either neglect or convert to positive, any measured negative correlation. This may leave a significant part of the sign-dependent functional structure undetected. Here we present a novel method, based on random matrix theory, for the identification of sign-dependent modules in the brain. Our method filters out both local (unit-specific) noise and global (system-wide) dependencies that typically obfuscate the presence of such structure. The method is guaranteed to identify an optimally contrasted functional 'signature', i.e. a partition into modules that are positively correlated internally and negatively correlated across. The method is purely data-driven, does not use any arbitrary threshold or network projection, and outputs only statistically significant structure. In measurements of neuronal gene expression in the biological clock of mice, the method systematically uncovers two otherwise undetectable, negatively correlated modules whose relative size and mutual interaction strength are found to depend on photoperiod.

Erratum: Estimating topological properties of weighted networks from limited information [Phys. Rev. E 92, 040802(R) (2015)].

This corrects the article DOI: 10.1103/PhysRevE.92.040802.

Maximum-Entropy Tools for Economic Fitness and Complexity.

The concepts of economic fitness and complexity, based on iterative and interdependent definitions of the quality of exporting countries and exported products, have led to novel insights into the dynamics of production and trade. A key step in the calculation of these quantities is the preliminary identification of statistically relevant country-product pairs.In this paper, we propose a method that could improve the current practice of filtering based on the revealed comparative advantage, by employing the maximum-entropy principle to construct an unbiased link weight probability distribution that, unlike the traditional thresholding method, allows for the statistical assessment of empirical trade volumes. The result is an adjusted geometric distribution for trade links that refines the revealed comparative advantage approach. This allows us to define the statistical significance of each trade link weight, leading to statistically supported trade link filtering decisions. Using this statistically justified filtering method, we have obtained results that are similar in nature to those that were found without this method, even though there are significant deviations in the details. In addition, the statistical information thus obtained on each trade link allows us to perform a spectral analysis of the export portfolio of individual economies.

Enhanced capital-asset pricing model for the reconstruction of bipartite financial networks.

Reconstructing patterns of interconnections from partial information is one of the most important issues in the statistical physics of complex networks. A paramount example is provided by financial networks. In fact, the spreading and amplification of financial distress in capital markets are strongly affected by the interconnections among financial institutions. Yet, while the aggregate balance sheets of institutions are publicly disclosed, information on single positions is mostly confidential and, as such, unavailable. Standard approaches to reconstruct the network of financial interconnection produce unrealistically dense topologies, leading to a biased estimation of systemic risk. Moreover, reconstruction techniques are generally designed for monopartite networks of bilateral exposures between financial institutions, thus failing in reproducing bipartite networks of security holdings (e.g., investment portfolios). Here we propose a reconstruction method based on constrained entropy maximization, tailored for bipartite financial networks. Such a procedure enhances the traditional capital-asset pricing model (CAPM) and allows us to reproduce the correct topology of the network. We test this enhanced CAPM (ECAPM) method on a dataset, collected by the European Central Bank, of detailed security holdings of European institutional sectors over a period of six years (2009-2015). Our approach outperforms the traditional CAPM and the recently proposed maximum-entropy CAPM both in reproducing the network topology and in estimating systemic risk due to fire sales spillovers. In general, ECAPM can be applied to the whole class of weighted bipartite networks described by the fitness model.

Network reconstruction via density sampling.

Reconstructing weighted networks from partial information is necessary in many important circumstances, e.g. for a correct estimation of systemic risk. It has been shown that, in order to achieve an accurate reconstruction, it is crucial to reliably replicate the empirical degree sequence, which is however unknown in many realistic situations. More recently, it has been found that the knowledge of the degree sequence can be replaced by the knowledge of the strength sequence, which is typically accessible, complemented by that of the total number of links, thus considerably relaxing the observational requirements. Here we further relax these requirements and devise a procedure valid when even the the total number of links is unavailable. We assume that, apart from the heterogeneity induced by the degree sequence itself, the network is homogeneous, so that its (global) link density can be estimated by sampling subsets of nodes with representative density. We show that the best way of sampling nodes is the random selection scheme, any other procedure being biased towards unrealistically large, or small, link densities. We then introduce our core technique for reconstructing both the topology and the link weights of the unknown network in detail. When tested on real economic and financial data sets, our method achieves a remarkable accuracy and is very robust with respect to the sampled subsets, thus representing a reliable practical tool whenever the available topological information is restricted to small portions of nodes.

Evidence for Weakened Intercellular Coupling in the Mammalian Circadian Clock under Long Photoperiod.

For animals living in temperate latitudes, seasonal changes in day length are an important cue for adaptations of their physiology and behavior to the altered environmental conditions. The suprachiasmatic nucleus (SCN) is known as the central circadian clock in mammals, but may also play an important role in adaptations to different photoperiods. The SCN receives direct light input from the retina and is able to encode day-length by approximating the waveform of the electrical activity rhythm to the duration of daylight. Changing the overall waveform requires a reorganization of the neuronal network within the SCN with a change in the degree of synchrony between the neurons; however, the underlying mechanisms are yet unknown. In the present study we used PER2::LUC bioluminescence imaging in cultured SCN slices to characterize network dynamics on the single-cell level and we aimed to provide evidence for a role of modulations in coupling strength in the photoperiodic-induced phase dispersal. Exposure to long photoperiod (LP) induced a larger distribution of peak times of the single-cell PER2::LUC rhythms in the anterior SCN, compared to short photoperiod. Interestingly, the cycle-to-cycle variability in single-cell period of PER2::LUC rhythms is also higher in the anterior SCN in LP, and is positively correlated with peak time dispersal. Applying a new, impartial community detection method on the time series data of the PER2::LUC rhythm revealed two clusters of cells with a specific spatial distribution, which we define as dorsolateral and ventromedial SCN. Post hoc analysis of rhythm characteristics of these clusters showed larger cycle-to-cycle single-cell period variability in the dorsolateral compared to the ventromedial cluster in the anterior SCN. We conclude that a change in coupling strength within the SCN network is a plausible explanation to the observed changes in single-cell period variability, which can contribute to the photoperiod-induced phase distribution.

Multiplexity and multireciprocity in directed multiplexes.

Real-world multilayer networks feature nontrivial dependencies among links of different layers. Here we argue that if links are directed, then dependencies are twofold. Besides the ordinary tendency of links of different layers to align as the result of "multiplexity," there is also a tendency to antialign as a result of what we call "multireciprocity," i.e., the fact that links in one layer can be reciprocated by opposite links in a different layer. Multireciprocity generalizes the scalar definition of single-layer reciprocity to that of a square matrix involving all pairs of layers. We introduce multiplexity and multireciprocity matrices for both binary and weighted multiplexes and validate their statistical significance against maximum-entropy null models that filter out the effects of node heterogeneity. We then perform a detailed empirical analysis of the world trade multiplex (WTM), representing the import-export relationships between world countries in different commodities. We show that the WTM exhibits strong multiplexity and multireciprocity, an effect which is, however, largely encoded into the degree or strength sequences of individual layers. The residual effects are still significant and allow us to classify pairs of commodities according to their tendency to be traded together in the same direction and/or in opposite ones. We also find that the multireciprocity of the WTM is significantly lower than the usual reciprocity measured on the aggregate network. Moreover, layers with low (high) internal reciprocity are embedded within sets of layers with comparably low (high) mutual multireciprocity. This suggests that, in the WTM, reciprocity is inherent to groups of related commodities rather than to individual commodities. We discuss the implications for international trade research focusing on product taxonomies, the product space, and fitness and complexity metrics.

Estimating topological properties of weighted networks from limited information.

A problem typically encountered when studying complex systems is the limitedness of the information available on their topology, which hinders our understanding of their structure and of the dynamical processes taking place on them. A paramount example is provided by financial networks, whose data are privacy protected: Banks publicly disclose only their aggregate exposure towards other banks, keeping individual exposures towards each single bank secret. Yet, the estimation of systemic risk strongly depends on the detailed structure of the interbank network. The resulting challenge is that of using aggregate information to statistically reconstruct a network and correctly predict its higher-order properties. Standard approaches either generate unrealistically dense networks, or fail to reproduce the observed topology by assigning homogeneous link weights. Here, we develop a reconstruction method, based on statistical mechanics concepts, that makes use of the empirical link density in a highly nontrivial way. Technically, our approach consists in the preliminary estimation of node degrees from empirical node strengths and link density, followed by a maximum-entropy inference based on a combination of empirical strengths and estimated degrees. Our method is successfully tested on the international trade network and the interbank money market, and represents a valuable tool for gaining insights on privacy-protected or partially accessible systems.

Systemic Risk Analysis on Reconstructed Economic and Financial Networks.

We address a fundamental problem that is systematically encountered when modeling real-world complex systems of societal relevance: the limitedness of the information available. In the case of economic and financial networks, privacy issues severely limit the information that can be accessed and, as a consequence, the possibility of correctly estimating the resilience of these systems to events such as financial shocks, crises and cascade failures. Here we present an innovative method to reconstruct the structure of such partially-accessible systems, based on the knowledge of intrinsic node-specific properties and of the number of connections of only a limited subset of nodes. This information is used to calibrate an inference procedure based on fundamental concepts derived from statistical physics, which allows to generate ensembles of directed weighted networks intended to represent the real system-so that the real network properties can be estimated as their average values within the ensemble. We test the method both on synthetic and empirical networks, focusing on the properties that are commonly used to measure systemic risk. Indeed, the method shows a remarkable robustness with respect to the limitedness of the information available, thus representing a valuable tool for gaining insights on privacy-protected economic and financial systems.

Mesoscopic Community Structure of Financial Markets Revealed by Price and Sign Fluctuations.

The mesoscopic organization of complex systems, from financial markets to the brain, is an intermediate between the microscopic dynamics of individual units (stocks or neurons, in the mentioned cases), and the macroscopic dynamics of the system as a whole. The organization is determined by "communities" of units whose dynamics, represented by time series of activity, is more strongly correlated internally than with the rest of the system. Recent studies have shown that the binary projections of various financial and neural time series exhibit nontrivial dynamical features that resemble those of the original data. This implies that a significant piece of information is encoded into the binary projection (i.e. the sign) of such increments. Here, we explore whether the binary signatures of multiple time series can replicate the same complex community organization of the financial market, as the original weighted time series. We adopt a method that has been specifically designed to detect communities from cross-correlation matrices of time series data. Our analysis shows that the simpler binary representation leads to a community structure that is almost identical with that obtained using the full weighted representation. These results confirm that binary projections of financial time series contain significant structural information.