What is its essence?
Yes, the fact is that if you have conceived a business, conceived a project, then it can completely come true, but under one condition - that all the favorable factors are present.
As soon as one factor is missing, your entire business can go downhill. The simultaneous combination of all the necessary factors can be called an exception.

For the first time in his book, biologist Jared Diamond used this principle; he explained why not all animals can be domesticated and what conditions are needed for this.

• An animal must grow quickly in order to be profitable and economical.
• Breed in captivity. Not every animal is ready to do this locked up - this is the problem of many zoos.
• Unpretentiousness in food.
• Friendliness - is it possible to tame his obstinate temper?
• Reaction to danger - animals react differently to danger; there are some that run away at full speed and are unlikely to be collected later.
• Independence - Individualists and loners by nature are poor candidates for domestication.

The combination of all these factors led to the domestication of many animal species

Krasnoyarsk professor Alexander Gorban uses this principle to explain the range of economic phenomena. He also introduced it into circulation. On its basis, he studied the adaptation of various systems and organisms to external conditions. He studied why banking system collapses, ups and downs in markets, mortality after oncology operations, etc.

The point is that by observing the statistical relationship of certain quantities of financial systems, how they behave under the influence of external factors, it is possible to calculate the crisis, even before it begins, to find hidden tension. If you like, predict the future.
Paraphrasing Tolstoy's statement, he concluded that

“all well-adapted systems are similar to each other, all maladapted systems experience problems with adaptation - each in its own way”

If the pressure of external factors becomes stronger and stronger, then this leads to economic suicide - the full principle of “Anna Karenina”.

I bring to your attention;

• What does the expression "black swan" mean?
• What does the concept of shock therapy mean? What does it include?

Krasnoyarsk professor of applied mathematics Alexander Gorban, teaching at
British University of Leicester, became the author of the “Anna Karenina principle”. The essence of the principle
is that the scientist saw the existence of stress and subsequent negative consequences in
economic processes, in particular in the stock market. Such observations and building on them
based on mathematical models could help in risk management.

Patterns of stress

It all started when a team of researchers from the Siberian Federal University (Krasnoyarsk), led by Professor Gorban, turned to many previously conducted observations of groups of people and animals, as well as trees and other plants, on the one hand, and tracking stock quotes and changes in banking sector - on the other.

All this was done for one purpose. “Many fields, from physiology to economics, animal behavior or ecological adaptation, have studied groups of similar systems, be they cells, stock prices or trees, adapting to polluted environments. By studying the dynamics of correlation and disparity in many systems that are influenced by external or environmental factors, we can usually predict a crisis and the timing of its onset even before its obvious signs appear, as the correlation between entities increases and their disparity simultaneously increases ( and variability),” the mathematician comments on the essence of the problem.

To explain what is meant, the following example is given. The effect of hot steam from a thermal power plant on a Scottish pine tree growing nearby was studied. To evaluate its response to emissions, metabolic products in the needles (metabolites) were analyzed. At the same time, the control group of Scottish pines of the same age was located far from the thermal power plant and the emissions did not affect them in any way. Metabolites in the control group of pine trees were on average normal. The typical difference in the test group was 2.56 times higher, and the difference in correlations was enormous: in the test group the correlations were almost five times higher.

Similar things can be observed in relation to humans. Physically healthy people in dirty industrial areas experience stress on a physiological level. The body adapts to maintain normal functioning. But sooner or later, this constant stress leads to failures in the form of cardiovascular diseases and cancer. And the percentage of these ailments will be higher than in residents of environmentally friendly areas.

The same effect is observed in the stock market. For example, in the share price performance of the 30 largest companies that traded on the London Stock Exchange from August 14 to October 14, 2008, the correlations increased fivefold and the differences increased sevenfold.

Alexander Gorban's work can explain what happens when the resources for the normal functioning of an economic system are almost exhausted. He points out that this could be seen as the "Anna Karenina principle" in action.

How to avoid falling under a train

Leo Tolstoy's novel begins with the phrase: “All happy families are alike, each unhappy family is unhappy in its own way.” Gorban paraphrases: “All well-adapted systems are similar to each other, all unadapted systems experience problems with adaptation, each in its own way.” And he adds that “fractured” systems actually become more correlated in their misfortunes, leading to a predictable crisis.

This approach builds on an earlier idea known as “adaptive energy,” originally put forward by endocrinologist Hans Selay in the 1930s. He wrote that “adaptation energy” represents physiological resources, what is also called increased endurance when the body is under conditions of biological stress. Gorban and his colleagues demonstrated that the same concept could be applied to financial institutions by using the energy of adaptation metaphor to statistically analyze economic systems.

However, this is not the end. If the pressure of external factors increases even more, then the “order of adaptive disorder,” according to the scientist, is destroyed to a completely disordered state, an economic “fatal outcome” or economic suicide, if you like. This outcome is the full implementation of the “Anna Karenina principle.”

It is important that physiological stress and people’s behavior in Gorban’s theory is not a cause, but a model for explaining economic cataclysms. “What is monitored is not the level of stress of people, but the “level of stress” of adapting entities—firms. A correlation adaptometry method has been developed that allows this to be done. It is applicable to ensembles of the same type of adapting subjects and does not depend on nature,” Alexander Gorban told RBC daily.

According to him, the likelihood of “death by a train” can be traced not only in relation to the stock market: “Mikhail Dorrer and his graduate student Sergei Masaev worked with in-house statistics. The first results are quite successful: it is possible to find hidden tensions and predict company crises, the scientist notes. “Another area of ​​application is the analysis of the Russian financial and banking systems.”

Meanwhile, the professor’s theory itself is still in development. “We are not building a comprehensive mathematical model, but we find a number of signal indicators based on indirect signs - analysis of correlations instead of price dynamics, etc. Harbingers of a crisis appear before noticeable drops in stock exchange and other indicators. Whether they can be used regularly is a question for further research,” sums up Alexander Gorban.

Leo Tolstoy's novel Anna Karenina begins with the phrase: “All happy families are alike, each unhappy family is unhappy in its own way.” Based on this aphorism, the so-called Anna Karenina principle was derived, which is used to describe systems in various sciences.

Anna Karenina's principle describes situations where the success of any project, idea or business is possible only if a number of factors are simultaneously present and, therefore, the absence of one of these factors dooms the business to failure. The principle was popularized in Jared Diamond's book Guns, Germs and Steel, in which he explored the geographic, cultural, environmental and technological factors that led to the dominance of Western civilization throughout the world. Diamond uses this principle to illustrate why there are so few examples of domestication of wild animals in human history: the absence of only one necessary factor is enough for an animal not to be domesticated. The simultaneous combination of all necessary factors is rather an exception.

Alexander Gorban uses Anna Karenina's principle when analyzing the widest range of crisis phenomena - in physiology from adaptation crises when climate conditions change to the dynamics of postoperative mortality in cancer patients, in economics from banking collapses to changes in recessions and upswings in financial markets. In their work, Gorban and his colleagues study the adaptation of various systems to the external environment. Based on the analysis of correlations between factors and their variations, the authors note that during prosperous periods, systems behave the same, but in moments of crisis, behavior begins to differ. In other words, the authors paraphrase Tolstoy’s aphorism as follows: “All well-adapted systems are similar, all maladapted systems fail to cope with adaptation, each in its own way,” and add: “It seems paradoxical, but when the difference between systems increases, they simultaneously become more correlated."

Thus, “order emerges from the chaos of maladaptation”: during periods of crisis, both dispersion (systems become more “dissimilar”, the size of the data cloud grows) and correlations (the size of the data cloud decreases) increase simultaneously. The theory of the effect is based on the concept of adaptation energy, introduced by G. Selye in the 1930s. Based on this supplemented principle of Anna Karenina, a method of correlation adaptometry was created.

In economics, it is used to analyze various objects: from individual enterprises to national banking systems.

In physiology, Gorban's approach is successfully used by various authors in the comparative analysis of adaptation in various situations, in health and pathology, and from human physiology to plant adaptation.

Proponents of socionics cite a quote from Anna Karenina as an illustration of the basic socionic hypothesis: compatibility in the family is much more likely to arise between dual types than between any others.

Vladimir Arnold in his book “The Theory of Catastrophes” describes the so-called. “The principle of the fragility of good,” which, in a certain sense, complements the Anna Karenina Principle. “Good” systems must simultaneously possess a number of properties, and therefore are more fragile than bad ones:

... for a system belonging to a special part of the stability boundary, with a small change in parameters, it is more likely to fall into the instability region than into the stability region. This is a manifestation of the general principle that good things (such as sustainability) are more fragile than bad things. Apparently, all good objects satisfy several requirements at the same time, while an object that has at least one of a number of shortcomings is considered bad.

Krasnoyarsk professor of applied mathematics Alexander Gorban, who teaches at the British University of Leicester, became the author of the “Anna Karenina principle”, seeing commonality in the reactions to stress of living organisms and economic systems.

“Many fields from physiology to economics, animal behavior or ecological adaptation have studied groups of similar systems, be it cells, stock prices or trees, adapting to polluted environments. By studying the dynamics of correlation and disparity in many systems that are influenced by external or environmental factors, we can usually predict a crisis and the timing of its onset even before its obvious signs appear, as the correlation between entities increases and their disparity simultaneously increases ( and variability),” a mathematician who led a team of researchers from the Siberian Federal University (Krasnoyarsk) told RBC daily.

The following example is given as an explanation. The effect of hot steam from a thermal power plant on a Scottish pine tree growing nearby was studied. To evaluate its response to emissions, metabolic products in the needles (metabolites) were analyzed. At the same time, a control group of Scottish pines of the same age was located far from the thermal power plant, and the emissions did not affect them in any way. Metabolites in the control group of pine trees were on average normal. The typical difference in the test group was 2.56 times higher, and the difference in correlations was enormous: in the test group the correlations were almost 5 times higher.

Another example: physically healthy people in dirty industrial areas experience stress on a physiological level. The body adapts to maintain normal functioning. But sooner or later, this constant stress leads to failures in the form of cardiovascular diseases and cancer. And the percentage of these ailments will be higher than in residents of environmentally friendly areas.

The same effect is observed in the stock market. For example, in the dynamics of the share prices of the 30 largest companies that traded on the London Stock Exchange from August 14 to October 14, 2008, the correlations increased by 5 times, and the difference increased by 7 times.

Alexander Gorban's work can explain what happens when the resources for the normal functioning of an economic system are almost exhausted. He points out that this could be seen as the "Anna Karenina principle" in action. Paraphrasing Leo Tolstoy, Gorban points out: “All well-adapted systems are similar to each other, all unadapted systems experience problems with adaptation, each in its own way.” And he adds that “fractured” systems actually become more correlated in their misfortunes, leading to a predictable crisis.

This approach builds on an earlier idea (known as "adaptive energy") originally put forward by endocrinologist Hans Selay in the 1930s. He wrote that “adaptation energy” represents physiological resources, what is also called increased endurance when the body is under conditions of biological stress. Gorban and his colleagues demonstrated that this concept could be applied to financial institutions and used the "energy of adaptation" metaphor for statistical analysis of economic systems. If the pressure of external factors increases to a certain level, it comes to “economic suicide”. This outcome is the full implementation of the “Anna Karenina principle.”

It is important that physiological stress and people’s behavior in Gorban’s theory is not a cause, but a model for explaining economic cataclysms. “What is monitored is not the level of stress of people, but the “level of stress” of adapting subjects - firms. A correlation adaptometry method has been developed that allows this to be done. It is applicable to ensembles of the same type of adapting subjects and does not depend on nature,” Gorban explained to RBC daily.

According to him, through similar observations and the search for “hidden tensions,” it is possible to predict crises not only in stock markets, but also within firms. “Another area of ​​application is the analysis of the Russian financial and banking systems,” notes the scientist.

The professor's theory is still in development. “We are not building a comprehensive mathematical model, but we find a number of signal indicators based on indirect signs - analysis of correlations instead of price dynamics, etc. Harbingers of a crisis appear before noticeable drops in stock exchange and other indicators. Whether they can be used regularly is a question for further research,” sums up Gorban.