Cascading failures and the emergence of cooperation in evolutionary-game based models of social and economical networks

We study catastrophic behaviors in large networked systems in the paradigm of evolutionary games by incorporating a realistic "death" or "bankruptcy" mechanism. We find that a cascading bankruptcy process can arise when defection strategies exist and individuals are vulnerable to deficit. Strikingly, we observe that, after the catastrophic cascading process terminates, cooperators are the sole survivors, regardless of the game types and of the connection patterns among individuals as determined by the topology of the underlying network. It is necessary that individuals cooperate with each other to survive the catastrophic failures. Cooperation thus becomes the optimal strategy and absolutely outperforms defection in the game evolution with respect to the "death" mechanism. Our results can be useful for understanding large-scale catastrophe in real-world systems and in particular, they may yield insights into significant social and economical phenomena such as large-scale failures of financial institutions and corporations during an economic recession. (C) 2011 American Institute of Physics. [doi:10.1063/1.3621719]