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on Network Economics |
| By: | Stennek, Johan (Research Institute of Industrial Economics); Tangerås, Thomas (Research Institute of Industrial Economics) |
| Abstract: | This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when access prices are determined in bilateral negotiations. A light-handed regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required. A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability. |
| Keywords: | Network Competition; Two-way Access; Access Price Competition; Entry; Regulation; Network Substitutability |
| JEL: | L51 L96 |
| Date: | 2006–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0685&r=net |
| By: | Börje Johansson (Jönköping International Business School); John Quigley (University of California, Berkeley) |
| Abstract: | We consider the parallel developments in the economics of agglomeration and the economics of networks. We explore the complentarities between the productivity benefits of agglomeration and those of network linkages, arguing that networks of actors dispersed over space may substitute for agglomerations of actors at a single point. |
| Date: | 2006–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:bphupl:1053&r=net |
| By: | Tetsuji Okazaki (Faculty of Economics, University of Tokyo); Michiru Sawada (Faculty of Eoconomics, Nagoya-Gakuin University) |
| Abstract: | In this paper we identify networks among banks in pre-war Japan based on director interlocking data, and explore their implications. It was found that nearly 60% of banks had interlocking ties with at least one other bank. The large regional banks tended to have many interlocking ties. One of the effects of the inter-bank networks was reducing the probability of bank failure. This result is consistent with the descriptive evidences that banks supported a bank in the same network through supplying liquidity, in case it was faced with liquidity shortage. At the same time, a bank tended to choose a bank in the same network as a counterpart of consolidation, which suggests that inter-bank networks lowered the coordination cost of consolidation. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:tky:jseres:2006cj150&r=net |
| By: | Andras Niedermayer |
| Abstract: | We consider a software vendor first selling a monopoly platform and then an application running on this platform. He may face competition by an entrant in the applications market. The platform monopolist can benefit from competition for three reasons. First, his profits from the platform increase. Second, competition serves as a credible commitment to lower prices for applications. Third, higher expected product diversity may lead to higher demand for his application. Results carry over to non-software platforms and, partially, to upstream and downstream firms. The model also explains why Microsoft Office is priced significantly higher than Microsoft's operating system. |
| Keywords: | Platforms; entry; complementary goods; price commitment; product diversity; Microsoft; vertical integration; two-sided markets |
| JEL: | D41 D43 L13 L86 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp0604&r=net |
| By: | Fernando Leiva B. (Economics University of Iowa) |
| Abstract: | This paper provides formal treatment to the idea of patenting as a form of market stealing between R&D firms. It extends the creative destruction literature by allowing innovations to build off each other forming a network of ideas. Patent citations keep track of this network. The theory maps the distribution of productivities in the development of new ideas onto the distribution of patent values through patent citations. If productivities are drawn from a Pareto-Levy distribution then the distribution of patent values also falls within this class. The theory is then applied to data on US patent citations. Model-based valuations support the assumption of Pareto-distributed productivities. As an added feature, model-based valuations outperform citation counts (the traditional measure) as a proxy for patent values |
| Keywords: | Patents, Innovation, R&D, Networks |
| JEL: | O31 O33 D85 |
| Date: | 2006–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed006:834&r=net |
| By: | Dubois, P.; Hernandez Perez, A.; Ivaldi, M. |
| Abstract: | This paper analyzes the demand and cost structure of the french market of academic journals, taking into account its intermediary role between researchers, who are both producers and consumers of knowledge. This two sidedness feature will echoes similar problems already observed in electronic markets-payment card systems, video games console, etc-such as the chicken and egg problem, where readers won't buy a journal if they do not expect its articles to be academically relevant and researchers, that live under the mantra "publish or perish", will not submit to a journal with either limited public reach or weak reputation. After the merging of several databases, we estimate the aggregated nested logit demand system combined simultaneously with a cost function. We identify the structural parameters of this market and find that price elasticities of demand are quite large and margins relatively low, indicating that this industry experiences competitive constraints. ...French Abstract : Cet article analyse la structure de la demande et des coûts du marché français des revues scientifiques. Nous estimons un "nested logit" pour le modèle de demande et identifions les paramètres structurels de ce marché. Nous trouvons que les élasticités prix de la demande sont assez grandes et les marges relativement faibles ce qui indique que cette industrie est relativement concurrentielle. |
| Keywords: | REVUE; RECHERCHE SCIENTIFIQUE; PUBLICATION PERIODIQUE; EVALUATION; CHERCHEUR |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:rea:inrawp:200606&r=net |
| By: | Jean, JASKOLD-GABSZEWICZ (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Didier, LAUSSEL; Nathalie, SONNAC |
| Abstract: | We study access pricing by platforms providing internet services or pay-TV to users while they allow advertisers to have access to these users against payment via ads or banners. Users are assumed to be ad-haters. It is shown that equilibrium access prices in the usersÕ market are increasing in the dimension of the advertising market : the larger the number of advertisers, the higher the access prices for both platforms. |
| Date: | 2006–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2006044&r=net |
| By: | David Huffman (University of California, Berkeley); John Quigley (University of California, Berkeley) |
| Abstract: | Among the many sorting functions provided by institutions of higher education, there is a geographic dimension. During the years spent as students and residents of local communities, students develop specific networks and contacts, and perhaps their tastes change as well. After graduation, these students may be more likely to reside in the locality or region in which they have been educated.This paper presents evidence which suggests that the university is important in attracting human capital to the local area and in stimulating entrepreneurial talent in the region.We also measure the strength of the impact of the university on geographical location in one specific instance. For post-graduate professional business and engineering students at Berkeley, we compare the spatial distribution of residences before attending the university and again after graduation.The results are suggestive of the importance of academic institutions in the geographic pattern of agglomerations of footloose scientific firms, such as those in the Silicon Valley just south of San Francisco. The results also reinforce the self-interested reasons for government investment in high-quality educational institutions, as measured by the return on the augmented human capital stock in the region. |
| Date: | 2006–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:bphupl:1044&r=net |