A Normal Copula Model for the Economic Risk Analysis of Correlated Failures in Communications Networks

Maurizio Naldi (Università di Roma "Tor Vergata", Italy)

Giuseppe D'Acquisto (Università di Roma "Tor Vergata", Italy)

Abstract: The reliability of a communications network is often evaluated without taking into account the economic consequence of failures. Here a new approach is proposed to assess the economic consequences of failures as a figure of merit of reliable networks. For this purpose a partition of the network operator's market into service basins is proposed, which includes the presence of correlation between the subsystems needed to serve different service basins as well as within the same service basin. A simulation algorithm, based on the Cross-Entropy method, is fully described to evaluate the probability that the economic loss exceeds a given threshold. An application of the method to a simple scenario is finally reported.

Keywords: communications networks, reliability, risk analysis

Categories: C.2, C.4