
on Network Economics 
By:  Ana, MAULEON (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)); Huasheng, SONG (Zhejiang University); Vincent, VANNETELBOSCH 
Abstract:  The paper examnes the formation of free trade agreements as a network formation game. We consider a threecountry model in which international trade occurs between economies with imperfectly competitive product markets. Labor markets can be unionized and nonunionized in each country. We show that if all countries are of the same type (all of them are either unionized or nonunionized), the global free trade network is both the unique pairwise stable network and the unique efficient network. If some countries are unionized while others are nonunionized, other networks apart from the global free trade network are likely to be pariwise stable. however the efficient network is always the global free trade network. Thus, a conflict between stability and efficiency may occur. Moreover, starting from the network in which no country has signed a free trade agreement, all sequences of networks due to continuously profitable deviations to do not lead (in most cases) to the global free trade network, even when global free trade is stable 
Keywords:  Freetrade agreements, Network formation games, Unionization 
JEL:  F15 F16 C70 
Date:  2006–06–15 
URL:  http://d.repec.org/n?u=RePEc:ctl:louvec:2006029&r=net 
By:  Herings P. JeanJacques; Mauleon Ana; Vannetelbosch Vincent (METEOR) 
Abstract:  We propose a new concept, the pairwise farsightedly stable set, in order to predict which networks may be formed among farsighted players. A set of networks G is pairwise farsightedly stable (i) if all possible pairwise deviations from any network g ∈ G to a network outside G are deterred by the threat of ending worse off or equally well off, (ii) if there exists a farsightedly improving path from any network outside the set leading to some network in the set, and (iii) if there is no proper subset of G satisfying (i) and (ii). We show that a nonempty pairwise farsightedly stable set always exists and we provide a full characterization of unique pairwise farsightedly stable sets of networks. Contrary to other pairwise concepts, pairwise farsighted stability yields a Pareto dominating network, if it exists, as the unique outcome. Finally, we study the relationship between pairwise farsighted stability and other concepts such as the largest consistent set. 
Keywords:  Economics ; 
Date:  2006 
URL:  http://d.repec.org/n?u=RePEc:dgr:umamet:2006046&r=net 
By:  Hoesel Stan van (METEOR) 
Abstract:  The Stackelberg pricing problem has two levels of decision making: tariff setting by an operator, and then selection of the cheapest alternative by customers. In the network version, an operator determines tariffs on a subset of the arcs that he owns. Customers, who wish to connect two vertices with a path of a certain capacity, select the cheapest path. The revenue for the operator is determined by the tariff and the amount of usage of his arcs. The most natural model for the problem is a (bilinear) bilevel program, where the upper level problem is the pricing problem of the operator, and the lower level problem is a shortest path problem for each of the customers. This paper contains a compilation of theoretical and algorithmic results on the network Stackelberg pricing problem. The description of the theory and algorithms is generally informal and intuitive. We redefine the underlying network of the problem, to obtain a compact representation. Then we describe a basic branchandbound enumeration procedure. Both concepts are used for complexity issues and for the development of algorithms: establishing NPhardness, approximability, special cases solvable in polynomial time, and an efficient exact branchandbound algorithm. 
Keywords:  Economics ; 
Date:  2006 
URL:  http://d.repec.org/n?u=RePEc:dgr:umamet:2006042&r=net 
By:  D'Haultfoeuille, Xavier; Davezies, Laurent; Fougère, Denis 
Abstract:  This paper considers the semiparametric identification of endogenous and exogenous peer effects based on group size variation. We show that Lee (2006)’s linearinmeans model is generically identified, even when all members of the group are not observed. While unnecessary in general, homoskedasticity may be required in special cases to recover all parameters. Extensions to asymmetric responses to peers and binary outcomes are also considered. Once more, most parameters are semiparametrically identified under weak conditions. However, recovering all of them requires more stringent assumptions. Eventually, we bring theoretical evidence that the model is more adapted to small groups. 
Keywords:  linearinmeans model; semiparametric identification; social interactions 
JEL:  C14 C21 C25 
Date:  2006–10 
URL:  http://d.repec.org/n?u=RePEc:cpr:ceprdp:5865&r=net 
By:  Rachel Levy; Pascale Roux; Sandrine Wolff 
Abstract:  This paper analyses the modalities according to which a large European university collaborates with firms by exploring its relational portfolio. We address this issue by exploiting a database listing more than 1000 firms having collaborated with the University Louis Pasteur between 1990 and 2002. First, using multicorrespondence analysis, we derive a fourclasses typology of collaborative behaviours, each of them presenting a strong internal coherence. We obtain four distinct collaboration patterms, for which the frequency of interactions and the exclusive vs. open character of the relationships are discriminating features. Second, using a multinomial logit estimation, we show how this diversity is connected to some individual attributes of the firms: size, legal status, industrial sector and geographic distance from the public partner. 
Keywords:  Scienceindustry collaborations; Typology; Industrial collaboration patterns. 
JEL:  L21 L31 O32 
Date:  2006 
URL:  http://d.repec.org/n?u=RePEc:ulp:sbbeta:200627&r=net 