Endogenous versus Exogenous Origins of Crises

Abstract

Are large biological extinctions such as the Cretaceous/Tertiary KT boundary due to a meteorite, extreme volcanic activity or self-organized critical extinction cascades? Are commercial successes due to a progressive reputation cascade or the result of a well orchestrated advertisement? Determining the chain of causality for extreme events in complex systems requires disentangling interwoven exogenous and endogenous contributions with either no clear or too many signatures. Here, I review several efforts carried out with collaborators, which suggest a general strategy for understanding the organization of several complex systems under the dual effect of endogenous and exogenous fluctuations. The studied examples are: Internet download shocks, book sale shocks, social shocks, financial volatility shocks, and financial crashes. Simple models are offered to quantitatively relate the endogenous organization to the exogenous response of the system. Suggestions for applications of these ideas to many other systems are offered.

23 pages with 6 figures, to be published in a monograph on extreme events, V. Jentsch editor (Springer, 2005)

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Cited by in corpus (4)

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• Limits of Declustering Methods for Disentangling Exogenous from Endogenous Events in Time Series with Foreshocks, Main shocks and Aftershocks
• Endogenous versus Exogenous Origins of Diseases
• "Bubbles in Society": The Example of the United States Apollo Program