Monday, October 17, 2011

12:00 PM   Registration  
1:00 PM   Workshop: Complex Adaptive Systems

Lecture by: Dr. Hamid Benbrahim, Fidelity Investments

This workshop introduces concepts and frameworks that describe the behavior of complex adaptive systems. These systems, whether they are systems of people, like employees or customers, or systems of organizations like competitors, partners and suppliers are characterized by a great deal of self-organization and evolution. These dynamics give rise to black swans, exponential growth, and disruptive market forces.

2:30 PM   Break  
2:40 PM   Workshop: Complex Networks

Lecture by: Dr. Jukka-Pekka Onnela, Harvard University

People are increasingly using their network to inform their purchasing decisions, and Businesses are becoming increasing interdependent. These are only a few examples of the impact of interconnectedness in today's business environment. This workshop introduces tools and technologies to address high levels of interconnectedness. It will address particular topics in social network analysis, systems risk, and fault tolerance. Understanding how people are connected or how industries affect each other is critical in managing and harnessing complexity today.

4:10 PM   Break  
4:20 PM   Workshop: Agent Based Modeling

Lecture by Brian Peltonen, Fidelity Investments

Agent Based Modeling is probably the most effective tool today in helping decision makers validate their assumptions, explore possible outcomes of their decisions, and better understand the behavior of their customers, employees, and competitors. This workshop will introduce tools and methodologies to allow decision makers to build models that represent their business problems, and conduct effective scenario planning.

5:50 PM   Reception

Sponsored by Suffolk University Alumni Association


Tuesday, October 18, 2011

7:30 AM   Continental breakfast & Registration  
8:30 AM   Welcome and Introduction

William O'Neill Jr., Dean of the Sawyer Business School

8:45 AM   Welcome to Suffolk University

Barry Brown, J.D., Suffolk University Acting President and Provost

9:00 AM   Understanding Financial Systemic Risk Through Complexity

Ren Cheng, Fidelity Investments

Current economic and finance theory, based on linear models and mathematics derived from classical physics failed to predict, or explain, the dynamics of financial markets. This talk will address the complexity of global financial markets and describe some of the dynamics that result in "once-in-a-life-time" events, that characterized the world economy in the past twenty years.

10:15 AM   Break  
10:30 AM   Scaling and Sustainability of Cities and Corporations: an interdisciplinary quantitative synthesis of organizational and dynamical aspects of human social organization

Dr. Geoffrey West, The Santa Fe Institute

Dr. West has discovered that cities and corporations can be described by simple, mathematical laws. His universal scaling theory explains growth in wealth, crime rate, walking speed in cities, as well as profitability and innovation in large corporations. These same laws apply to the natural world governing metabolic rate in animals, or tree population in forests.

12:00 PM   Lunch and Conversation

Provided in the Function Room

1:00 PM   The Structure and Dynamics of The Network of Export Similarity

Dany Bahar, Harvard Kennedy School of Government

International knowledge diffusion have been studied in the economic literature for decades, and the general understanding is that technology and knowledge diffuses locally rather than globally. Some of the most studied candidates driving this diffusion are flows of goods (trade) and capital (FDI) across countries. By using disaggregated data on exports as an indicator of knowledge diffusion I first show how this measure is consistent with previous literature by constructing a network of export similarities. I explain dynamic processes that define this network. In addition, by using data on bilateral migration flows for over 120 countries, I can partly explain these patterns of diffusion. I study this patterns in both the sending and receiving country. The preliminary results suggest that an important component of knowledge used in exports/production is tacit and flows embedded in the migrants' human capital.

1:30 PM   Mortgage Financing: Complexity as a Creator of Risk and an Impediment to Recovery

Kathleen C. Engel J.D. , Suffolk University Law School

Complex financial instruments can allocate risk in ways that help borrowers, investors and capital markets. As the financial crisis revealed, this complexity can also undermine economic stability. During the subprime boom, risky loans and the securities they backed were sliced and diced through securitization and resecuritizations. The entities involved in creating the securities had little incentive to police loan originators because they could pass off most of the risk. Those that stood to lose-borrowers and investors-often had the least information to protect themselves. The risks associated with subprime loans grew exponentially as firms developed ever more complex instruments, like collateralized debt obligations (CDOs) and credit default swaps that allowed investors to place bets on the performance of bonds and CDOs. Today, a single loan can be linked to hundreds of financial instruments around the world.
Complexity not only impeded informed decision-making when it came to securities and derivatives linked to housing, but it has also restricted the recovery of housing markets. With multiple entities holding pieces of the stream of income from home loans, it is impossible to value the securities and derivatives. As a result, today almost all of the funding for home mortgages comes from the United States government through Fannie Mae and Freddie Mac rather than the private securitization market. In addition, loan modifications, foreclosures, and short sales, all of which would ultimately help stabilize the housing market are fraught with problems because of securitization. This is not to say that securitization is all bad. What we need is a secondary market where complexity adds value without sacrificing transparency or undermining economy recovery.

2:30 PM   Break  
2:45 PM   Art-of-the-State: politics and policy in an age of complexity

Adam Price, Harvard Kennedy School of Government

3:45 PM   Break  
4:00 PM   Systemic Risk- Enabling communication in the face of complexity

Dr. Charles Worrell, MITRE Corporation

Systemic risk in the U.S. financial system has drawn the attention of leaders in government and business alike. The abundance of systemic risk measures and risk models has added to the complex task of understanding, discussing, and acting on the implications of that risk. Tools that assist decision makers to interpret risk measures, and recognize their underlying assumptions may lead to deeper understanding and more effective discussion. This talk describes a multi-disciplinary effort to demonstrate the impact of using an integrated modeling and analysis environment on the communication effectiveness achieved while assessing complex financial data. The modeling environment is engineered to support execution of quantitative models including agent based and network models against equivalent scenarios of economic conditions. The environment provides tools to compare and visualize model outputs, and to allow decision makers to maintain traceability from model outputs back to their underlying assumptions. This capability may facilitate the operation of a modeling forum where disparate teams of analysts can collaborate to provide insights into the nation's exposure to systemic financial risk.

4:30 PM   Panel Discussion, Current Complex Issues and the Need for New Thinking

Geoffrey West, Dean LeBaron, Ricardo Hausmann, Hamid Benbrahim. Moderated by Cesar Hidalgo

5:30 PM   Networking Reception  

Wednesday, October 19, 2011

7:30 AM   Continental breakfast  
8:30 AM   Complexity and the Cloud

Michail Bletsas, MIT Media Lab

9:30 AM   Attribution in Complex Systems

Dr. Eric Bonabeau, Icosystem

Digital marketers are obsessed with the last click, advertisers with the last ad that precedes conversion. The traffic jam you're in must be due to an accident. Health insurers' pay-for-performance schemes are based on strict adherence to guidelines during one visit to the doctor. Disasters are blamed on the events that trigger them. A very large deficit is attributed to a president in office. A couple getting divorced believe their last fight is the cause. We as humans are obsessed with finding simple, preferably linear, cause-effect relationships in everything. Yet we know that things are very, very rarely as simple as we would like them to be. Our urge to simplify has been shaped by evolutionary pressure and is probably well-adapted to slow-changing, relatively simple environments. In today's world, simplifying heuristics can be counter-productive. One universal issue we face when dealing with complex systems is that of attribution: how to assign figures of merit to the multiple touchpoints that may have contributed to an outcome? Giving all the credit to the last touchpoint is a simplifying heuristic which makes no sense in a wide range of situations. The marketing funnel should be called marketing maze. The traffic jam you're in may be due to no single reason -there may not even be a trigger. Performance in healthcare should be an ecosystem concept, and not be reduced to one visit in a vacuum. Disasters are usually the result of many interacting factors working in synergy. A president in office is probably only partly responsible for a country's deficit. And you're not getting divorced just because of a nasty argument last week. We need a different framework for dealing with these situations and move beyond the usual culprit/scapegoat mindset. A machine learning approach known as reinforcement learning provides a powerful new lens to augment our causal intuition. Concrete examples from advertising, healthcare and risk management will illustrate how this could become a revolutionary tool.

10:30 AM   Break  
10:45 AM   Modeling the innovation related outcomes of co-creation practices in technology-driven firms

Dr. Stoyan Tanev, Institute of Technology and Innovation, University of Southern Denmark

Value co-creation is an emerging business, marketing and innovation paradigm describing the tendency of firms to adopt practices enabling their customers to become active participants in the design and development of personalized products, services and experiences. It requires a re-conceptualization of value chains into complex and dynamic networks of value-producing relations between producers, suppliers, customers and end users. Value co-creation networks are characterized by emergent properties and thus difficult to study. It is important therefore to test and validate analytical tools that would enable further research. The objective of the present contribution is to examine the relationship between value co-creation and innovation in technology-driven firms by using the Artificial Neural Network (ANN) approach. The empirical analysis by ANN shows that such a relationship exists, and this result is confirmed by linear regression analysis. In addition, two different techniques were used to classify firms in terms of the degree of their co-creation activities - cluster analysis and the self-organizing map (SOM) algorithm. The main contribution of this work is in providing a purely quantitative analysis of the relationship between firms' involvement in co-creation activities and some of their innovation-related metrics without any preliminary assumption about the specific type of such relationship.

11:15 AM   Cascading Events in Techno-Social Complex Networks

Dr. Alessandro Vespignani, Northeastern University

This talk will focus on the study of "techno-social" systems, where infrastructures composed of different technological layers are interoperating within the social component that drives their use and development. In this context we aim at understanding how the very same elements assembled in large number can give rise to different macroscopic and dynamical behaviors, opening the path to quantitative computational approaches and forecasting power.

12:15 PM   Lunch and Conversation

Provided in the Function Room

1:15 PM   Entropy of dynamical social networks

Kun Zhao, Northeastern University

Dynamical social networks are evolving rapidly and are highly adaptive. Characterizing the information encoded in social networks is essential to gain insight into the structure, evolution, adaptability and dynamics. Recently entropy measures have been used to quantify the information in email correspondence, static networks and mobility patterns. Nevertheless, we still lack methods to quantify the information encoded in time-varying dynamical social networks. In this talk we present a model to quantify the entropy of dynamical social networks and use this model to analyze the data of phone-call communication. We show evidence that the entropy of the phone-call interaction network changes according to circadian rhythms. Moreover we show that social networks are extremely adaptive and are modified by the use of technologies such as mobile phone communication. Indeed the statistics of duration of phone-call is described by a Weibull distribution and is significantly different from the distribution of duration of face-to-face interactions in a conference. Finally we investigate how much the entropy of dynamical social networks changes in realistic models of phone-call or face-to face interactions characterizing in this way different type human social behavior.

1:45 PM   How we think together

Dr. David Lazer, Northeastern University

How do we think together? In particular, how do groups of individuals solve problems, and how do our patterns of communication affect collective problem solving? This presentation summarizes a series of laboratory and computational experiments which highlight the dual effects of communication on problem solving in groups. On the one hand, communication allows individuals to find out how others solve a particular problem and thus allows quick dissemination of "best practices." However, communication may also squelch diversity of approaches, and thus reduce the creativity of the group/organization. This presentation discusses this dual role, with a particular focus on the various possible interventions to balance these competing effects.

2:45 PM   Break  
3:00 PM   Characterizing Patterns of Human Activities and Adoptions of Innovations in the City

Dr. Marta Gonzalez, MIT

In my talk I will present methods of analysis and models to characterize various aspects of human activity. In the first part of the talk I will focus in analyzing the regular yet rich temporal dynamics in individuals daily activities during weekdays and weekends. We employ statistical learning techniques (i.e., principal component analysis and K-means clustering algorithm) to analyze self-reported activity patterns of 30,000 individuals. We explore three critical issues: (1) the inherent daily activity structure of individuals in a metropolitan area, (2) the temporal variation of individual activities - how they grow and fade over time, and (3) the classification of individual behaviors and the revelation of related social demographic characteristics using large-scale longitudinal data.
In the second part I explore adoptions of innovations at the city level. Using data from the adoption of the popular micro-blogging platform, Twitter, we present a model of adoption on a network that places friendships in real geographic space and exposes individuals to mass media influence. We show that homopholy both amongst individuals with similar propensities to adopt a technology and geographic location is critical to reproduce features of real spatiotemporal adoption at a national scale.

4:00 PM   Complex Governance

Dr. Greta Meszoely, Suffolk University

"Good governance" became the catch phrase of the twenty-first century, as policy makers, economists and engineers, looked for a breakthrough to address the issue of sustainability. Failed strategies like nation building to provide social stability, river damming to secure fresh water, and urban zoning to promote economic activity, have shown that sustainability is a complex question beyond securing resources, or enacting the right policies.

4:45 PM   Closing Remarks  
5:00 PM   Adjourn