Chapter

Extreme Events in Nature and Society

Part of the series The Frontiers Collection pp 95-119

Endogenous versus Exogenous Origins of Crises

  • Didier SornetteAffiliated withInstitute of Geophysics and Planetary PhysicsDepartment of Earth and Space Sciences, University of CaliforniaLaboratoire de Physique de la Matière Condensée, Université de Nice — Sophia Antipolis

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Summary

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 Xevents in complex systems requires disentangling interwoven exogenous and endogenous contributions with either no clear signature or too many signatures. Here, I review several efforts carried out with collaborators which suggest a general strategy for understanding the organizations 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.