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Resilience in Homogeneous Networks: A Strategic Network Formation Approach

This paper introduces a framework for studying resilience of networked systems in the presence of strong network externalities. The framework used in this paper explicitly incorporates costs of connection and the benefits that are received by direct and indirect access to resources. We show that this simple framework is capable of capturing the three key parameters of resilience: Magnitude of Performance drop, transient to recovery and post recovery performance. We also show that the model can capture certain phase transitions as a result of single-node disruption. While we focus on homogeneous structures, assume efficiency, and consider only node failure, the framework can easily be used in modeling more general performance schemes and be extended to link failure or hybrid scenarios where both links and nodes are disrupted.