nep-net New Economics Papers
on Network Economics
Issue of 2006‒03‒05
four papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. ‘Unfair’ Discrimination in Two-sided Peering? Evidence from LINX By Alessio D’Ignazio; Emanuele Giovannetti
  3. The limits of modularity in innovation and production By Leonardo Bargigli
  4. Social capital and political bias in knowledge sharing: An exploratory study By A. WILLEM; H. SCARBROUGH

  1. By: Alessio D’Ignazio; Emanuele Giovannetti
    Abstract: Does asymmetry between Internet Providers affect the “fairness” of their interconnection contracts? While recent game theoretic literature provides contrasting answers to this question, there is a lack of empirical research. We introduce a novel dataset on micro-interconnection policies and provide an econometric analysis of the determinants of peering decisions amongst the Internet Service Providers interconnecting at the London Internet Exchange Point (LINX). Our key result shows that two different metrics, introduced to capture asymmetry, exert opposite effects. Asymmetry in “market size” enhances the quality of the link, while asymmetry in “network centrality” induces quality degradation, hence “unfairer” interconnection conditions.
    Keywords: Internet Peering, Two-sided Markets, Network Industries, Antitrust
    JEL: L14 L86 L96 C81 L40
    Date: 2006–02
  2. By: María Fernanda Viecens
    Abstract: In this paper we construct a simple model of platform price competition with two main novel features. First, platforms endogenously decide the quality of their `access service' and second, each group exhibits preferences not only about the number of agents in the opposite group, but also about their type or quality. Additionally, sellers also care about the type of agents in their own group. Our interest is to examine the set of conditions under which, in spite of the network externalities, more than one plaftorm coexist in equilibrium. We show that when quality is endogenously determined by the choices of agents these platforms could be asymmetric.
    Date: 2006–02
  3. By: Leonardo Bargigli (Department of Economc Sciences, Florence University, Italy)
    Abstract: Modularity has gained recently a growing attention in the management literature as a key to explain the contemporary trends of industrial dynamics, according to which external «market-based» economies have become predominant over internal «bureaucracy-based» economies. Nowadays global supply-networks play a key role for a large share of material and immaterial inputs in many sectors, and the diffusion of modular architectures for products, in connection with flexible production systems, is often indicated by the literature as the main driver for this change. In order to analyze better this connection, in this paper a model is presented which tries to focus on the factors that influence the competitive performance of internal versus outsourced production when the two options are subject to a trade-off with respect to the kind of innovation strategies they can use. In particular through a set of exploratory agent-based simulations we verify two hypotheses. The first one is the existence of a trade-off between decentralized search and complexity, as suggested by a recent strand of literature which has modeled innovation as a discovery process on complex fitness landscapes. The second one is a comparative advantage of centralized search, which occurs, for all levels of complexity, when the returns of innovation are lower. When the conditions just described occur in a competitive context, the limits of modularity become apparent.
    Keywords: Modular design, Product innovation, Networks
    JEL: L22 L15 C63
    Date: 2005–09
    Abstract: The benefits of social capital for the sharing of knowledge are frequently emphasized in the literature (Burt, 1997; Kostava & Roth, 2003; Nahapiet & Ghoshal, 1998; Tsai, 2000). However, a few authors have also begun to draw our attention towards the drawbacks of social capital for the working of organizations (Adler & Kwon, 2002; Edelman, Bresnen, Newell, & Scarbrough, 2004). In particular, instrumental social capital –as opposed to consummatory social capital- is seen as linked to power relations, which can inhibit the sharing of knowledge (Burt, 1997; Kale et al., 2000). To contribute to this debate on the role of social capital, we carried out a qualitative study in two Belgian companies. Our findings reveal that social capital tends to enhance the sharing of knowledge but that instrumental social capital in particular reflects opportunistic and political objectives, which causes a selective form of knowledge sharing.
    Keywords: case studies, informal networking, knowledge sharing, politicking, social capital
    Date: 2005–12

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