This paper introduces a simple model of endogenous network formation and systemic risk. In the model, firms form joint ventures called ‘links' which are subsequently subjected to shocks that are either good or bad. Bad shocks incentivize default. Links yield full benefits only if the...

This paper introduces a model of endogenous network formation and systemic risk. In it, agents form networks that efficiently trade-off the possibility of systemic risk with the benefits of trade. Second, fundamentally ‘safer' economies generate higher interconnectedness, which in turn leads...

This paper is motivated by the following question: How to construct good approximation for the distribution of the solution value to linear optimization problem, when the random objective coefficients follow a multivariate normal distribution? Using Stein's Identity, we show that the least...

Simchi-Levi et al. (2014, 2015a) proposed a novel approach using the Time-To-Recover (TTR) parameters to analyze the Risk Exposure Index (REI) of supply chains under disruption. This approach is able to capture the cascading effects of disruptions in the supply chains, albeit in simplified...