Abstract
We study the relaxation process of a supplier-customer network after mass destruction due to two giant earthquakes, Kobe 1995 and East Japan 2011, by investigating the number of chained failures. Firstly, a mass destruction and intervention of business activities in the damaged areas can be considered as a main shock. The exogenous shock was propagated on the supplier-customer network deteriorating financial states of other firms, even if they are not located in geographical neighbors. To quantify such aftershocks, we use chained failures on the network assuming that they indicate the trace of propagation of shocks. We show that the number of chained failures in its temporal change obeys an Omori-law, a power-law relaxation. This finding implies that the relaxation is much more sluggish than one would naively expect, and that it might be possible to estimate the extent and duration of aftershocks by using the empirical law. Several issues are discussed including the origin of the long-time relaxation.
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Notes
- 1.
The total number of firms is based on a census taken by the National Tax Administration Agency. Other censuses seem to give overestimation including inactive firms or underestimation due to cursory survey.
- 2.
It should be remarked that earlier result based on a fewer number of data for the East Japan Earthquake is written in [10]. The present paper gives extended results and detailed description of the network.
References
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Acknowledgements
The author would like to thank the organizers, F. Abergel, B.K. Chakrabarti, A. Chakraborti, A.K. Ghosh of the Econophys-Kolkata VI “Econophysics of systemic risk and network dynamics” for invitation and hospitality. This work is supported in part by the Program for Promoting Methodological Innovation in Humanities and Social Sciences by Cross-Disciplinary Fusing of the Japan Society for the Promotion of Science.
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Fujiwara, Y. (2013). Omori Law After Exogenous Shocks on Supplier-Customer Network. In: Abergel, F., Chakrabarti, B., Chakraborti, A., Ghosh, A. (eds) Econophysics of Systemic Risk and Network Dynamics. New Economic Windows. Springer, Milano. https://doi.org/10.1007/978-88-470-2553-0_3
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DOI: https://doi.org/10.1007/978-88-470-2553-0_3
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