nep-net New Economics Papers
on Network Economics
Issue of 2007‒12‒15
four papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Diffusion of the internet : a cross-country analysis By Serebrisky, Tomas; Diouf, Mame Astou; Cuberes, David; Andres, Luis
  3. Prospects for the hydrogen transition based on the network economic approach : Insights from the electricity and gas experience in Europe By Nuno Bento
  4. Testing the "Waterbed" Effect in Mobile Telephony By Christos Genakos; Tommaso Valletti

  1. By: Serebrisky, Tomas; Diouf, Mame Astou; Cuberes, David; Andres, Luis
    Abstract: This paper analyzes the process of Internet diffusion across the world using a panel of 199 countries during 1990-2004. The authors group countries in two categories-low and high-income countries-and show that the Internet diffusion process is well characterized by an S-shape curve for both groups. Low-income countries display a steeper diffusion curve that is equivalent to a right shift of th e diffusion curve for high-income countries. The estimated diffusion curves provide evidence of a " catching-up " process, although a very slow one. The paper explores the determinants of Internet diffusion at the country level and across the same income groups. The most novel finding is that network effects seem to be crucial-the number of Internet users in a country in a given year is positively associated with the number of users in the previous year. The findings also show that the degree of competition in the provision of Internet service contributes positively to its diffusion, and there are significant positive language externalities.
    Keywords: Technology Industry,Information Security & Privacy,E-Business,Income,Education for the Knowledge Economy
    Date: 2007–12–01
  2. By: Wilhelmsson, Mats (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Accumulation of human capital is essential for economic growth. An important question is how knowledge spillover into innovations and production. One way of knowledge diffusion is within innovation networks. We investigate innovative networks in patent data in Sweden from 1994-2001. We define research networks with the help of direct and indirect ties among inventors. The main result clearly indicates that those researchers that collaborating, in innovation networks, improves the efficiency of the innovation process by getting more patents applications approved. The odds getting a patent application approved are in the range 1.1 to 1.5 times better if an application is a result from research collaboration. Moreover, the result suggests that collaboration is more important in the IT sector than in the mechanical engineering sector. Finally, the empirical outcomes indicate that networking is more important in less dense areas compared to the denser labor markets. Thus, networks in such areas might be a substitute for agglomeration advantages.
    Keywords: Innovation network analysis; patents; success and failure in innovation
    JEL: N34 O31 R11
    Date: 2007–12–11
  3. By: Nuno Bento (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: This paper aims to investigate the transition to a new energy system based on hydrogen in the European liberalized framework. After analyzing the literature on the hydrogen infrastructure needs in Europe, we estimate the size and scope of the transition challenge.<br />We take the theoretical framework of network economics to analyze early hydrogen infrastructure needs. Therefore, several concepts are applied to hydrogen economics such as demand club effects, scale economies on large infrastructures, scope economies, and positive socio-economical externalities. On the examples of the electric and natural gas industry formation in Europe, we argue for public intervention in order to create conditions to reach more rapidly the critical size of the network and to prompt network externalities allowing for the market diffusion of and, thus, an effective transition to the new energy system.
    Keywords: Economics of regulation ; network economics ; technological change ; energy economics ; hydrogen ; electricity ; natural gas
    Date: 2007–11–28
  4. By: Christos Genakos; Tommaso Valletti
    Abstract: This paper examines the impact of regulatory intervention to cut termination rates of callsfrom fixed lines to mobile phones. Under quite general conditions of competition, theorysuggests that lower termination charges will result in higher prices for mobile subscribers, aphenomenon known as the "waterbed" effect. The waterbed effect has long beenhypothesized as a feature of many two-sided markets and especially the mobile networkindustry. Using a uniquely constructed panel of mobile operators' prices and profit marginsacross more than twenty countries over six years, we document empirically the existence andmagnitude of this effect. Our results suggest that the waterbed effect is strong, but not full.We also provide evidence that both competition and market saturation, but most importantlytheir interaction, affect the overall impact of the waterbed effect on prices.
    Keywords: telecommunications, regulation, "Waterbed" effect, two-sided markets
    JEL: D21 L51 L96
    Date: 2007–10

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