nep-net New Economics Papers
on Network Economics
Issue of 2008‒01‒12
four papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Strategic Information Extraction Through Networks By Antonio Jimenez-Martinez
  2. Existence of Nash Networks in One-Way Flow Models By Pascal Billand; Christophe Bravard; Sudipta Sarangi
  3. Unbundling and Incumbent Investment in Quality Upgrades and Cost Reduction By Vareda, João
  4. Virtual world experimentation: An exploratory study By Thomas Chesney; Swee-Hoon Chuah; Robert Hoffmann

  1. By: Antonio Jimenez-Martinez (School of Economics, Universidad de Guanajuato)
    Abstract: We develop a model of information transmission in networks where agents decide on costly information extraction from their neighbors. Agents have incomplete and complementary information about the underlying state. For a exogenously given network, each agent decides first on information extraction from her neighbors and then, after processing the information extracted, takes an action. The payoff to each agent has two components: (i) a concern about oneÕs own action and (ii) a concern about the other agentsÕ actions or team concern. We formalize the extraction of information by considering that each agent is able, by incurring a cost, to induce each of her neighbors to send her a signal. Then, each receiver updates her beliefs according to BayesÕ rule. We characterize both the efficient and the equilibrium information extraction strategy profiles for the overall game and relate them to the network architecture.
    Keywords: Communication Networks, Incomplete Information, Information Extraction, Complementarities, Coordination
    JEL: C72 D82 D83 D85
  2. By: Pascal Billand; Christophe Bravard; Sudipta Sarangi
    Abstract: This paper addresses the existence of Nash equilibria in one-way flow or directed network models in a number of different settings. In these models players form costly links with other players and obtain resources from them through the directed path connecting them. We find that heterogeneity in the costs of establishing links play a crucial role in the existence of Nash networks. We also provide conditions for the existence of Nash networks in models where costs and values of links are heterogeneous.
    Keywords: Network Formation, Non-cooperative Games
    JEL: C72 D85
    Date: 2007
  3. By: Vareda, João
    Abstract: We study the investment of a telecommunications incumbent in quality and in cost reduction when an entrant can use its network through unbundling of the local loop. We ?nd that unbundling may lower incentives for quality improvements, but raises incentives for cost reduction. Therefore, it is not true that all types of investment are crowded out with unbundling. If the regulator can commit to a socially optimal unbundling price before investment, the incumbent makes both types of investment. In the absence of commitment, the incumbent will not invest, so that unbundling regulation may lower welfare as compared to no regulation.
    Date: 2007
  4. By: Thomas Chesney (Nottingham University Business School); Swee-Hoon Chuah (Nottingham University Business School); Robert Hoffmann (Nottingham University Business School)
    Abstract: We explore the scientific potential of virtual worlds for experimental economists. In particular, we report the results of a series of virtual world experiments designed to examine the suitability of (a) users as subjects and (b) the computer interface as an experimental platform. Formal results and informal observations from the sessions are discussed in terms of the methodological opportunities and challenges of virtual experimentation generally.
    Keywords: virtual worlds, laboratory experiments, human values survey
    JEL: C72 C88 C99 Z13
    Date: 2007–12

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