nep-net New Economics Papers
on Network Economics
Issue of 2006‒04‒01
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Optimal Pricing with Recommender Systems By Dirk Bergemann; Deran Ozmen
  2. Patterns of Discovery By Mauro Caminati; Serena Sordi; Arsenio Stabile
  3. Change of the First Tier Supplier function and Pivot Firm, the case of the productive organization Airbus (In French) By MAZAUD Frédéric (LEREPS-GRES)
  4. Symmetries of Imperfect Competition on a Circle By Hennessy, David A.; Lapan, Harvey E.
  5. Stability, specialization and social recognition By Gilles,Robert P.; Lazarova,Emiliya A.; Ruys,Pieter H.M.
  6. Differences between domestic accounting standards and IAS: measurement, determinants and implications By Ding, Yuan; Hervé, Stolowy; Hope, Ole-Kristian; Jeanjean, Thomas

  1. By: Dirk Bergemann (Cowles Foundation, Yale University); Deran Ozmen (Boston Consulting Group)
    Abstract: We study optimal pricing in the presence of recommender systems. A recommender system affects the market in two ways: (i) it creates value by reducing product uncertainty for the customers and hence (ii) its recommendations can be offered as add-ons which generate informational externalities. The quality of the recommendation add-on is endogenously determined by sales. We investigate the impact of these factors on the optimal pricing by a seller with a recommender system against a competitive fringe without such a system. If the recommender system is sufficiently effective in reducing uncertainty, then the seller prices otherwise symmetric products differently to have some products experienced more aggressively. Moreover, the seller segments the market so that customers with more inflexible tastes pay higher prices to get better recommendations.
    Keywords: Recommender system, Collaborative filtering, Add-ons, Pricing, Information externality
    JEL: D42 D83 D85
    Date: 2006–03
  2. By: Mauro Caminati; Serena Sordi; Arsenio Stabile
    Abstract: From a given directed weighted network of knowledge links between technology fields, the paper develops a multisector dynamic model of incremental innovation and R&D activity in these fields. The model is focused on the equilibrium share distribution of these variables, which is proved to be locally stable, with reference to a simple low dimensional case. Simulation methods suggest that local, and also global, stability extend to any model dimension. It is also shown how different network structures map to different asymptotic share distributions. Using the NBER patents and patent citation data files, the analytical framework is then used to analyse some general features of the pattern of knowledge creation and transfer in the period 1975-1999. From a descriptive viewpoint, the changes in the share distribution of innovation activity predicted by the model match reasonably well the actual changes in the period
    Keywords: directed weighted network, knowledge spillovers, share distribution, incremental innovation and R&D dynamics, local stability, simulation, patents and patent citations
    JEL: O30 C61
    Date: 2006–02
  3. By: MAZAUD Frédéric (LEREPS-GRES)
    Abstract: This paper analyzes the transformations of industrial vertical relationships, and more particularly the current slide of the function of first tier suppliers towards the function of intermediation. The objective is to characterize this function of intermediation, basing on the strategic segmentation of the supply chain, made by the industrial actors within the productive organization of Airbus. The argumentation articulates into three parts. The first reconsiders the nature of the vertical subcontracting relations within the framework of complex productions. The second characterizes and defines Pivot-Firm. The third part brings out the organization of the vertical relations around Pivots Firm within the the productive organization of Airbus.
    Keywords: Pivot-Firm– Subcontracting– Network-Firm– Modular architecture– Interface– First Tier Suppliers– Equipment supplier– System supplier– Airbus
    Date: 2006
  4. By: Hennessy, David A.; Lapan, Harvey E.
    Abstract: Taking location as given, we study imperfect competition on a circular city. In Bertrand oligopoly, we identify price harmonics as a function of firm unit costs and locations. The sum of oligopoly profits is larger when costs and/or locations are more dispersed in the ‘dihedral majorization’ sense. This also tends to be the case in which prices are more variable. We study how phase shifts between cost parameters and inter-firm distance parameters change production and oligopoly profits. An exact characterization of production patterns is developed in terms of the eigenvalues for what we call the price harmonics matrix. The same techniques are applied to Cournot oligopoly with spatial externalities on Circular City. Solutions are compared with monopoly and with first-best. Production patterns can differ markedly when cost spillovers are negative.
    Keywords: cyclic and dihedral symmetries, harmonic analysis, price and quantity instruments,
    JEL: C6 E2 M2
    Date: 2006–03–23
  5. By: Gilles,Robert P.; Lazarova,Emiliya A.; Ruys,Pieter H.M. (Tilburg University, Center for Economic Research)
    Abstract: Yang s theory of economic specialization under increasing returns to scale (Yang 2001) is a formal development of the fundamental Smith-Young theorem on the extent of the market and the social division of labor. In this theory specialization and, thus, the social division of labor is firmly embedded within a system of perfectly competitive markets. This leaves unresolved whether and how such development processes are possible in economies based on more primitive, nonmarket organizations. In this paper we introduce a general relational model of economic interaction. Within this non-market environment we discuss the emergence of economic specialization and ultimately of economic trade and a social division of labor. We base our approach on three stages in organizational development: the presence of a stable relational structure; the presence of relational trust and subjective specialization; and, finally, the emergence of objective specialization through the social recognition of subjectively defined economic roles
    Keywords: networks;stability;social division of labor;specialization
    JEL: C78 D85
    Date: 2006
  6. By: Ding, Yuan; Hervé, Stolowy; Hope, Ole-Kristian; Jeanjean, Thomas
    Abstract: This study analyzes determinants and effects of differences between Domestic Accounting Standards (DSA) and Internationake Accounting Standards (IAS).
    Keywords: International accounting differences; institutional factors; earnings managements; synchronicity
    JEL: M40 M41
    Date: 2005–03–30

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