nep-net New Economics Papers
on Network Economics
Issue of 2007‒04‒28
five papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Price structure and network externalities in the telecommunications industry : evidence from Sub-Saharan Africa By Iimi, Atsushi
  2. Information Technology Use and Productivity at the Individual Level By Gandal, Neil; King III, Charles; Van Alstyne, Marshall W.
  3. Asset price dynamics with small world interactions under hetereogeneous beliefs By Valentin Panchenko; Sergiy Gerasymchuk; Oleg V. Pavlov
  4. Collective Social Dynamics and Social Norms By Fent, Thomas
  5. The Evolution of Roommate Networks: A Comment on Jackson and Watts JET (2002) By Klaus Bettina; Klijn Flip; Walzl Markus

  1. By: Iimi, Atsushi
    Abstract: Many developing countries have experienced significant developments in their telecommunications network. Countries in Africa are no exception to this. The paper examines what factor facilitates most network expansion using micro data from 45 fixed-line and mobile telephone operators in 18 African countries. In theory the telecommunications sector has two sector-specific characteristics: network externalities and discrimina tory pricing. It finds that many telephone operators in the region use peak and off-peak prices and termination-based price discrimination, but are less likely to rely on strategic fee schedules such as tie-in arrangements. The estimated demand function based on a discreet consumer choice model indicates that termination-based discriminatory pricing can facilitate network expansion. It also shows that the implied price-cost margins are significantly high. Thus, price liberalization could be conducive to development of the telecommunications network led by the private sector. Some countries in Africa are still imposing certain price restrictions. But more important, it remains a policy issue how the authorities should ensure reciprocal access between operators at reasonable cost.
    Keywords: Markets and Market Access,Economic Theory & Research,Access to Markets,Rural Communications,Infrastructure Regulation
    Date: 2007–04–01
  2. By: Gandal, Neil; King III, Charles; Van Alstyne, Marshall W.
    Abstract: We employ a unique data set on white-collar workers that combines direct observations of individual use of information technology as well as objective information on individual performance. The main hypothesis we examine is whether heavier users of IT are more productive, and if heavier users of IT are indeed more productive, how does this increase in productivity manifest itself? Our results suggest that, controlling for other factors, the size of an individual’s internal email network is more highly correlated with revenues generated by that individual than age, experience or education. Further, the number of unique electronic contacts is more significant than the number of messages, external network size, and all other measures of email communication including declared time spent on email. Additionally, even after accounting for the individual’s number of unique contacts within the firm, the social network measure of “betweenness” is also highly correlated with revenues. We attribute the strength of these results to the fine grain detail of the data on this form of task-based white collar work.
    Keywords: information technology; productivity; social networks
    JEL: J24 L86 O14
    Date: 2007–04
  3. By: Valentin Panchenko (School of Economics, University of New South Wales); Sergiy Gerasymchuk (Advanced School of Economics, University of Venice); Oleg V. Pavlov (Department of Social Science and Policy Studies, Worchester Polytechnic Institute)
    Abstract: We propose a simple model of a financial market populated with heterogeneous agents. The market represents a network with nodes symbolizing the agents and edges standing for connections between them, thus, embodying local interactions in the market. By local interactions we mean any kind of interplay between the decisions of the agents unaffected by the market mechanism and unrelated to the physical distance between the agents. Using the rewiring procedure we restructure a network from regular lattice to random graph by varying the probability of the agents to switch from one trading strategy to another. We study how the network structure influences the asset price dynamics. The results show that for some intermediate values of the probability to switch, corresponding to a small world network, the price dynamics become reminiscent to the real. While for the boundary values of the probability the dynamics lacks some typical features of the real financial markets.
    Keywords: local interactions, networks, small world, heterogeneous beliefs, price dynamics, bifurcations, chaos
    JEL: C45 C62 C63 D84 G12
    Date: 2007–03
  4. By: Fent, Thomas
    Abstract: How individual behaviour is determined or at least influenced by social norms is one of the classic questions of social theory. We consider a norm as a rule guiding individual decisions concerning rituals, beliefs, traditions, and routines. Whenever coordinated behaviour is enforced without the help of an authority, this may be due to social norms. The individual being in the situation of taking a decision at the micro level is guided by social norms imposed at the macro level. The set of all individual decisions in a society generates the macro level behaviour of the system which may strengthen or weaken the existing social norms. Thus, the long run development of social norms is the result of collective dynamics within a social network. We use an agent based simulation model to investigate the emergence, stability, and replacement of social norms within a population of artificial agents. A social network connecting the agents serves to communicate the social norms and the actual behaviour among the agent population. The agents in the network possess two types of links connecting them with their ingroup and with their outgroup, respectively. Agents have the desire to be associated and accepted by the members of their ingroup and they want to be different from the members of their outgroup. Consequently, they derive a utility from adhering to the social norm of their ingroup and from deviating from the social norm of their outgroup. Agents may adopt their behaviour according to the norms given by their ingroup and outgroup. Thus, our model explains under what conditions social norms prevail within a subgroup of the society or even become global norms being respected within the whole population.
    Keywords: social norms; sociel networks; social interaction; collective social dynamics; ingroup; outgroup; agent based modelling
    JEL: C63 C61 Z13 D85
    Date: 2006–02–23
  5. By: Klaus Bettina; Klijn Flip; Walzl Markus (METEOR)
    Abstract: In this note we extend Jackson and WattsJET2002''s result on the coincidence of S-stochastically stable and core stable networks from the marriage problem to the solvable roommate problem. In particular, we show that the polarization structure of the marriage problem on which the proof of Jackson and WattsJET2002 hinges, is not crucial for their result.
    Keywords: microeconomics ;
    Date: 2007

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