nep-net New Economics Papers
on Network Economics
Issue of 2008‒03‒15
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Dynamic Price Competition with Network Effects By Luis Cabral
  2. The Elusive Antitrust Standard on Bundling in Europe and in the United States at the Aftermath of the Microsoft Cases By Nicholas Economides; Ioannis Lianos
  3. Interconnection among Academic Journal Platforms: Multilateral versus Bilateral Interconnection By Doh-Shin Jeon; Domenico Menicucci
  4. Stable Economic Cooperation: A Relational Approach By Gilles, R.P.; Lazarova, E.A.; Ruys, P.H.M.
  5. What Is a Peer? The Role of Network Definitions in Estimation of Endogenous Peer Effects By Halliday, Timothy; Kwak, Sally
  6. Social Learning and Peer Effects in Consumption: Evidence from Movie Sales By Enrico Moretti

  1. By: Luis Cabral
    Date: 2008
  2. By: Nicholas Economides; Ioannis Lianos
    Date: 2008
  3. By: Doh-Shin Jeon; Domenico Menicucci
    Abstract: Electronic academic journal platforms provide new services of text and/or data mining and linking, indispensable for efficient allocation of attention among over- abundant sources of scientific information. Fully realizing the bene.t of these ser- vices requires interconnection among the platforms. Motivated by CrossRef, a mul- tilateral citation linking backbone, this paper performs a comparison between a multilateral interconnection regime and a bilateral one and finds that publishers are fully interconnected in the former while they may partially break connectivity in the latter for exclusion or di¤erentiation motives. Surprisingly, if partial intercon- nection arises for di¤erentiation motive, exclusion of small publisher(s) occurs more often under the multilateral regime than under the bilateral one. In addition, we show that our main result is robust in the case of Internet Backbone interconnec- tion. Finally, when publishers can interconnect both in a multilateral way and in a bilateral way, a conflict between a private incentive and a social incentive may arise when large publishers prefer excluding small publishers by opting for a bilateral interconnection. In this case, a light-handed regulation imposing no discrimination among rivals would foster full interconnection.
    Keywords: Multilateral Interconnection, Bilateral Interconnection, Academic Journals, Internet, Platforms
    JEL: D4 K21 L41 L82
    Date: 2008–03
  4. By: Gilles, R.P.; Lazarova, E.A.; Ruys, P.H.M. (Tilburg University, Center for Economic Research)
    Abstract: We consider a relational economy in which economic agents participate in three types of relational economic activities: autarkic activities; binary matching activities; and plural cooperative activities. We introduce a stability notion and characterize stable interaction structures, both in the absence of externalities from cooperation as well as in the presence of size-based externalities. It is shown that institutional elements such as the emergence of socio-economic roles and organizations based on hierarchical leadership structures support and promote stable economic development.
    Keywords: Cooperatives;Networks;Clubs;Relational economies;Stable matchings
    JEL: C72 D71 D85
    Date: 2008
  5. By: Halliday, Timothy (University of Hawaii at Manoa); Kwak, Sally (University of Hawaii at Manoa)
    Abstract: We employ a standard identification strategy from the peer effects literature to investigate the importance of network definitions in estimation of endogenous peer effects. We use detailed information on friends in the Adolescent Longitudinal Health Survey (Add Health) to construct two network definitions that are less ad hoc than the school-grade cohorts commonly used in the educational peer effects literature. We demonstrate that accurate definitions of the peer network seriously impact estimation of peer effects. In particular, we show that peer effects estimates on educational achievement, smoking, sexual behavior, and drinking are substantially larger with our more detailed measures than with the school-grade cohorts. These results highlight the need to further understand how friendships form in order to fully understand implications for policy that alters the peer group mix at the classroom or cohort level.
    Keywords: peer effects, education, adolescent health
    JEL: I12 I20
    Date: 2008–02
  6. By: Enrico Moretti
    Abstract: Using box-office data for all movies released between 1982 and 2000, I test the implications of a simple model of social learning in which the consumption decisions of individuals depend on information they receive from their peers. The model predicts different box office sales dynamics depending on whether opening weekend demand is higher or lower than expected. I use a unique feature of the movie industry to identify ex-ante demand expectations: the number of screens dedicated to a movie in its opening weekend reflects the sales expectations held by profit-maximizing theater owners. Several pieces of evidence are consistent with social learning. First, sales of movies with positive surprise and negative surprise in opening weekend demand diverge over time. If a movie has better than expected appeal and therefore experiences larger than expected sales in week 1, consumers in week 2 update upward their expectations of quality, further increasing week 2 sales. Second, this divergence is small for movies for which consumers have strong priors and large for movies for which consumers have weak priors. Third, the effect of a surprise is stronger for audiences with large social networks. Finally, consumers do not respond to surprises in first week sales that are orthogonal to movie quality, like weather shocks. Overall, social learning appears to be an important determinant of sales in the movie industry, accounting for 38% of sales for the typical movie with positive surprise. This implies the existence of a large "social multiplier'' such that the elasticity of aggregate demand to movie quality is larger than the elasticity of individual demand to movie quality.
    JEL: J0 L15
    Date: 2008–03

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