nep-net New Economics Papers
on Network Economics
Issue of 2006‒07‒02
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Two-Sided Markets with Pecuniary and Participation Externalities By Schmidtke, Richard
  2. Telecommunications policies: Measurement and determinants By Gual, Jordi; Trillas, Francesc
  3. Private Provision of a Complementary Public Good By Schmidtke, Richard
  4. Networks and Firm Location By José Pedro Pontes
  5. Information and intellectual property: The global challenges By Aiyer Ghosh, Rishab; Soete, Luc
  6. Ségrégation résidentielle, accessibilité aux emplois et chômage : le cas de l'Ile-de-France By Laurent Gobillon; Harris Selod

  1. By: Schmidtke, Richard
    Abstract: The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising and offer consumers a service free of charge (such as a TV program) that is financed through advertising. We show that advertising can exhibit the properties of a strategic substitute or complement. Surprisingly, there exist cases in which platforms benefit from market entry. Moreover, we show that from a welfare point of view perfect competition is not always desirable.
    Keywords: two-sided markets; broadcasting; advertising; market entry; digital television
    JEL: D43 L13 L82
    Date: 2006–06
  2. By: Gual, Jordi (IESE Business School); Trillas, Francesc (Universitat Autonoma de Barcelona)
    Abstract: This paper presents new data on telecommunications reform for a cross section of countries. We measure telecommunications reform along two dimensions: entry barriers and regulatory independence. This data set is combined with a comprehensive set of performance, institutional and political data to analyze the determinants of telecommunications policies. We find that entry barriers are positively associated with the degree to which countries have an interventionist legal tradition, but they are unrelated to the partisan ideology of reforming governments. We also find that countries with weak protection of investors' quasi-rents by other means, and countries with a larger incumbent are more prone to create independent regulatory agencies, although this last result is statistically weaker.
    Keywords: Telecommunications policies; Liberalization; Regulation;
    JEL: F21 L32 L96
    Date: 2006–05–24
  3. By: Schmidtke, Richard
    Abstract: For several years, an increasing number of firms are investing in Open Source Software (OSS). While improvements in such a non-excludable public good cannot be appropriated, companies can benefit indirectly in a complementary proprietary segment. We study this incentive for investment in OSS. In particular we ask how (1) market entry and (2) public investments in the public good affects the firms' production and profits. Surprisingly, we find that there exist cases where incumbents benefit from market entry. Moreover, we show the counter-intuitive result that public spending does not necessarily lead to a decreasing voluntary private contribution.
    Keywords: Open Source Software; Private Provision of Public Goods; Cournot-Nash Equilibrium; Complements; Market Entry
    JEL: C72 L13 L86
    Date: 2006–06
  4. By: José Pedro Pontes
    Abstract: This paper models the decision of vertically-linked firms to build either partitioned or connected networks of supply of an intermediate good. In each case, the locations of upstream and downstream firms are correlated. Input specificity is related both to variable costs (transport costs of the input) and fixed costs (learning costs of the use of the input). When both are low, a connected network emerges and a partitioned pattern arises in the opposite case. In the boundary region, there are multiple equilibria, either asymmetric (mixed network) or symmetric.
    Keywords: Vertically-linked industries; Intermediate goods; Networks; Input flexibility.
    JEL: R30 L13
  5. By: Aiyer Ghosh, Rishab (UNU-MERIT); Soete, Luc (UNU-MERIT)
    Abstract: The paper analyses the contribution of 'golden papers' - seminal works whose ideas remain as fresh and relevant today as when they were first published decades ago - and which continue to dominate academic discourse among successive generations of scholars. The authors analyse why two works written within an industrial development context: The simple economics of basic scientific research, by Richard Nelson (1959) and Kenneth Arrows Economic Welfare and the Allocation of Resources for Invention (1962), are so relevant in today’s knowledge-driven economic paradigm. Focusing on the papers’ application to current global policy debates on information/knowledge and intellectual property, they argue that while the context has changed the essential nature of innovation - driven by widespread access to the ability to replicate and improve - remains the same. Hence a focus on endogenous innovation policy is as relevant today as it was 50 years ago.
    Keywords: knowledge economy, science and technology, innovation, intellectual property rights, institutional change
    JEL: O31 O34 O32 O17
    Date: 2006
  6. By: Laurent Gobillon; Harris Selod
    Abstract: This paper starts with a review of the economic literature stressing how problems of residential segregation and physical access to jobs can exacerbate urban unemployment.We also present some descriptive statistics on residential segregation and disconnection from jobs in the Paris region using data from the 1999 census of the population and commuting time matrices provided by the ministry of infrastructure for 2000. We then estimate the impact of the local context (segregation and disconnection from jobs) on the transitions from unemployment to work using data from the Labor Force Survey between 1990 and 2002. We show that unemployed workers in segregated areas experience additional difficulties in finding a job. A sensitivity analysis confirms that these spatial effects are robust when the endogeneity of residence is taken into account.
    Keywords: Residential segregation ;spatial mismatch ; social networks ; redlining ; urban unemployment
    JEL: J64 R14
    Date: 2006–06

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