nep-net New Economics Papers
on Network Economics
Issue of 2005‒03‒13
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Pairwise-Stability and Nash Equilibria in Network Formation By Antoni Calvó-Armengol; Rahmi Ilkiliç
  3. Internet Entrepreneurship: Networks and Performance of Internet Ventures In China By BAT BATJARGAL
  4. Social Interaction and the Health Insurance Choices of the Elderly By Eldar Beiseitov; Jeffrey D. Kubik; John R. Moran
  5. Measurement and Explanation of the Intensity of Co-publication in Scientific Research: An Analysis at the Laboratory Level By Jacques Mairesse; Laure Turner
  6. Network Triads: Transitivity, Referral and Venture Capital Decisions in China and Russia By BAT BATJARGAL

  1. By: Antoni Calvó-Armengol (Universitat Autònoma de Barcelona, Université de Toulouse Sciences Sociales and CEPR); Rahmi Ilkiliç (Universitat Autònoma de Barcelona)
    Abstract: Suppose that individual payoffs depend on the network connecting them. Consider the following simultaneous move game of network formation: players announce independently the links they wish to form, and links are formed only under mutual consent. We provide necessary and sufficient conditions on the network link marginal payoffs such that the set of pairwise stable, pairwise-Nash and proper equilibrium networks coincide, where pairwise stable networks are robust to one-link deviations, while pairwise-Nash networks are robust to one-link creation but multi-link severance. Under these conditions, proper equilibria in pure strategies are fully characterized by one-link deviation checks.
    Keywords: Network formation, Pairwise-stability, Proper equilibrium
    JEL: C62 C72 D85 L14
    Date: 2005–03
    Abstract: This study examines the impact of entrepreneurs’ network structure and knowledge homogeneity/heterogeneity of their network members on product development, and revenue growth of software ventures in China and Russia. The empirical data are composed of structured interviews with 159 software entrepreneurs in Beijing and Moscow. The study found that structural holes and knowledge heterogeneity affect positively product diversity in interactive ways. The study also found that knowledge homogeneity accelerates product development. Product development speed enhances revenue growth in the long term. However, the combination of speed with dense and homogeneous networks harms revenue growth over time. The effects of structural holes and knowledge heterogeneity on product diversity and revenue growth over time are more salient in Russia due to the unique institutional, social, and cultural conditions present in the country.
    Keywords: networks, knowledge, entrepreneurs, software, China, Russia.
    JEL: M13 D85 L14 L25 P27
    Date: 2005–02–01
    Abstract: This article examines the contingent value of entrepreneurs' networks to survival likelihood of Internet ventures, and the dynamics of entrepreneurs' networks over time. The empirical data are composed of the longitudinal surveys of 94 Internet ventures in Beijing, China. The study found the positive and the negative contingent effects of structural holes on the survival likelihood of new firms. The study found that networking skills of entrepreneurs are associated positively with the changes in networks over time. Improved social skills lead to greater firm legitimacy.
    Keywords: Structural holes, human capital, Internet, entrepreneurship, China
    JEL: M13 D85 L14 L25 P27
    Date: 2005–02–01
  4. By: Eldar Beiseitov (Department of Economics, Maxwell School, Syracuse University); Jeffrey D. Kubik (Center for Policy Research, Maxwell School, Syracuse University); John R. Moran (Center for Policy Research, Maxwell School, Syracuse University)
    Abstract: Using data from the 1998 wave of the Health and Retirement Study, we examine the effect of social interactions on the health insurance choices of the elderly. We find that having more social interactions, as measured by contacts with friends and neighbors, reduces the likelihood of enrolling in a Medicare managed care plan relative to purchasing a medigap policy or having coverage through Medicare alone. Our estimates indicate that social networks are an important determinant of the health insurance choices of the elderly and provide suggestive evidence that "word-of-mouth" information sharing may have played a role in the preference of some seniors for traditional indemnity insurance over managed care.
    JEL: I11 J14
    Date: 2004–05
  5. By: Jacques Mairesse; Laure Turner
    Abstract: In order to study networks of collaboration between researchers, we propose a simple measure of the intensity of collaboration, which can be easily interpreted in terms of relative probability and directly aggregated at the laboratory level. We use this measure to characterize the relations of collaboration, as defined in terms of co-publication, between the physicists the French %u201CCentre National de la Recherche Scientifique%u201D (CNRS), in the field of condensed-matter, between 1992 and 1997, and to investigate how they vary with regards to various factors: mainly the geographical distance between laboratories, but also their specialization and size, their productivity and the quality of their publications, and their international openness. We find that the average intensity of co-publication within laboratories is about 40 times higher than the intensity between laboratories but within towns, and 100 times higher than the intensity between laboratories and between towns. Yet, geographical distance does not have a significant impact, or a very weak one, on the existence and intensity of co-publication of researchers located in different towns. We also find that the productivity laboratories, their size and proximity in specialization profiles are significant factors of collaboration.
    JEL: D29 O39
    Date: 2005–03
    Abstract: This article examines effects of dyadic ties and interpersonal trust on referrals and investment decisions of venture capitalists in the Chinese and Russian contexts. The study uses the postulate of transitivity of social network theory as a conceptual framework. The findings reveal that referee-venture capitalist tie, referee-entrepreneur tie, and interpersonal trust between referee and venture capitalist have positive effects on referrals and investment decisions of venture capitalists. The institutional, social and cultural differences between China and Russia have minimal effects on referrals. Interpersonal trust has positive effects on investment decisions in Russia.
    Keywords: Transitivity, triads, referral, venture capital, China, Russi
    JEL: G24 D85 M13 P27
    Date: 2005–02–01

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