nep-net New Economics Papers
on Network Economics
Issue of 2005‒07‒25
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. The role of networks in collective action with costly communication. By Christian R. Jaramillo H.
  2. Friendship Relations in the School Class and Adult Economic Attainment By Andrea Galeotti; Gerrit Mueller
  3. Accessing Formal Credit: Social Capital versus ‘Social Position’ (Lesson from a Javanese Village) By Aloysius Gunadi Brata
  4. Networks And Effectiveness In Work Teams: The Impact Of Diversity By JUAN CARLOS PASTOR; MARGARITA MAYO
  5. Monopoly Prices versus Ramsey-Boiteux Prices: Are they "similar", and: Does it matter? By Felix Höffler
  6. A taxonomy of business processes By LUIS EDUARDO SOLIS; ANGEL ANTONIO DIAZ; OSWALDO LORENZO

  1. By: Christian R. Jaramillo H.
    Abstract: Individuals frequently contribute their resources voluntarily to provide public goods. This paper models the manner in which the linkage between members in a community influences the likelihood of such actions through spontaneous activism in networks. The model I use abstracts from the issue of free-riding behavior by means of small deviations from standard preferences. Instead, it concentrates on the communication aspect of provision through collective action. The solution concept is Nash equilibrium. I find that the likelihood of efficient provision of a discrete public good in random social networks increases very rapidly for parameter values where the network experiences a phase transition and large-scale decentralized activism becomes feasible. As a result, the model shows that successful coordination may be more readily achieved the larger the population is, provided its members are sufficiently connected. In contrast with previous results in the literature, this results holds even as the size of the population increases without bound, and it is consistent with the existence of largescale activism in large populations.
    Keywords: Collective Action
    JEL: D70
    Date: 2005–06–25
  2. By: Andrea Galeotti (California Institute of Technology and University of Essex); Gerrit Mueller (Erasmus University Rotterdam, Tinbergen Institute and IZA Bonn)
    Abstract: We analyze the impact of adolescents’ friendship relations in their final-year class of high school on subsequent labor market success. Based on a typology of network positions we locate each student within the social system of the school class as either: an isolate, a sycophant, a broker or a receiver. These positions identify individuals’ social standing within the group of classmates and proxy for their interpersonal behavior and social competencies. We offer empirical evidence that differential social standing in adolescence predicts large and persistent earnings disparities over the entire life course. The estimated wage premia and penalties do not appear to be substantially confounded by measures of family and school resources, and materialize largely independent of differences in cognitive abilities, grade rank in class, personality traits or friends’ characteristics. A moderate share of the earnings inequalities is mediated by differential post-secondary human and social capital investment. From a conceptual point of view, we contribute an application of egocentered network methods within conventional labor economic survey research.
    Keywords: friendship ties, social capital, earnings
    JEL: A14 I21 J31
    Date: 2005–07
  3. By: Aloysius Gunadi Brata (Research Institute, University of Atma Jaya Yogyakarta)
    Abstract: Low access to formal credit persists in most of developing economies also in Indonesia. Most of households especially in rural areas do not familiar with formal credit. Therefore, formal credit institution needs a mediation or substitution. Recent studies argue that social capital could to a better flow of information between creditors and borrowers and hence less adverse selection and moral hazard in the market for credit. The guarantee of groups and pressure by social network also are important techniques to improve credit performance. The relation between social capital and credit access is an interesting issue since the promotion of formal credit facilities in rural areas is argued as an important policy in reducing poverty level. The aim of this paper is to describe the connection between social capital and access to formal credit, especially from commercial banking in the case of a Javanese village. To describe the connection, this paper will seek what are the different characteristics between household that having access to commercial credit and the other group of households. However, since there is also an argument that social capital does not guarantee poor people to access formal credit, this paper also analyse other important variable namely ‘social position’ of the head of household in their rural community.
    Keywords: social capital, rural credit, formal credit, ‘social position’, Java, Indonesia
    JEL: G
    Date: 2005–07–17
  4. By: JUAN CARLOS PASTOR (Instituto de Empresa); MARGARITA MAYO (Instituto de Empresa)
    Abstract: This paper examine the role of social networks as mediating factors in the relationship between diversity and work team effectiveness. These effects were tested with a sample of 71 organizational teams. Results show that the degree of diversity in a team influences the density and centralization of the communication network. In turn, network density and centralization affect work team outcomes. Results are discussed in terms of their theoretical significance for network and diversity theory.
    Date: 2005–02
  5. By: Felix Höffler (Max Planck Institute for Research on Collective Goods, Bonn, Germany)
    Abstract: Ramsey-Boiteux prices and monopoly prices are frequently regarded as being similar. This might suggest that, in particular in network industries with large fixed costs, sometimes monopoly pricing is close to the Ramsey-Boiteux second best and welfare superior to imperfectly regulated prices. This paper tries to specify what is meant by "being similar", and it analyzes the welfare implications that can be drawn from comparing both sets of prices. Interdependence of demand and the impact of competition are discussed. We reinforce the view that monopoly prices are usually not "similar", and even if they are, this implies no positive welfare judgments on monopoly pricing.
    Keywords: Ramsey Pricing, Regulation, Access Pricing, Termination
    JEL: L33 L50 L94
    Date: 2005–04
  6. By: LUIS EDUARDO SOLIS (Instituto de Empresa); ANGEL ANTONIO DIAZ (Instituto de Empresa); OSWALDO LORENZO (Instituto de Empresa)
    Abstract: This study aims to gain a better understanding of key business processes. The processes of the firm are analyzed, proposing a classification of eight generic intra-organizational processes, and eleven generic inter-organizational processes, as well as criteria for the determination of the criticality of these processes and key performance indicators. Using these criteria critical intra-organizational and inter-organizational processes are identified in sixteen industrial sectors. Through a better understanding of key processes and network relations enterprises can develop competitive advantages that leverage their survival and well being.
    Keywords: Business process, Performance measurement, Inter-organizational, Intra-organizational
    Date: 2004–09

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