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Economics of Networked Infrastructures at the Edge of Undesirable Contagion: A Case of SIS Infection



Vladimir V. Marbukh


This paper reports on managing systemic risk of undesirable contagion in a networked system in a practically important case of high losses due to contagion. In this case, both socially optimal as well as selfish investments in the risk mitigation keep the system close to the boundary of the contagion-free region. However, while socially optimal investments result in asymptotically zero contagion losses, this is not the case for selfish investments. The loss in the system welfare for selfish investments, which is measured by the corresponding Price of Anarchy, is due to positive externalities. In this paper, we specifically consider a Susceptible-Infected-Susceptible (SIS) infection model with nodes capable of controlling the expected recovery times through investments. Assumption of high contagion losses not only allows for performance evaluation of selfish vs. socially optimal investments, but also for quantitative evaluation of various inefficiency mitigation strategies. Finally, we outline some directions of future research.
Proceedings Title
IEEE International Conference on Computer Communications
Conference Dates
April 15-19, 2018
Conference Location
Honolulu, HI


Susceptible-Infected-Susceptible (SIS) infection, socially optimal vs. selfish investments, inefficiency evaluation and mitigation.


Marbukh, V. (2018), Economics of Networked Infrastructures at the Edge of Undesirable Contagion: A Case of SIS Infection, IEEE International Conference on Computer Communications, Honolulu, HI, [online], (Accessed June 17, 2024)


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Created July 9, 2018, Updated May 14, 2020