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on Network Economics |
| By: | Economides , Nicholas (Stern School of Business); Tåg, Joacim (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We discuss the benefits of net neutrality regulation in the context of a two-sided market model in which platforms sell Internet access services to consumers and may set fees to content and applications providers "on the other side" of the Internet. When access is monopolized, we find that generally net neutrality regulation (that imposes zero fees "on the other side" of the market) increases total industry surplus compared to the fully private optimum at which the monopoly platform imposes positive fees on content and applications providers. Similarly, we find that imposing net neutrality in duopoly increases total surplus compared to duopoly competition between platforms that charge positive fees on content providers. We also discuss the incentives of duopolists to collude in setting the fees "on the other side" of the Internet while competing for Internet access customers. Additionally, we discuss how price and non-price discrimination strategies may be used once net neutrality is abolished. Finally, we discuss how the results generalize to other two-sided markets. |
| Keywords: | Net Neutrality; Two-sided Markets; Internet; Monopoly; Duopoly; Regulation; Discrimination |
| JEL: | C63 D40 D42 D43 L10 L12 L13 |
| Date: | 2008–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0727&r=net |
| By: | Alberto Baccini; Lucio Barabesi |
| Abstract: | The exploratory analysis developed in this paper relies on the hypothesis that each editor possesses some power in the definition of the editorial policy of her journal. Consequently if the same scholar sits on the board of editors of two journals, those journals could have some common elements in their editorial policies. The proximity of the editorial policies of two scientific journals can be assessed by the number of common editors sitting on their boards. A database of all editors of ECONLIT journals is used. The structure of the network generated by interlocking editorship is explored by applying the instruments of network analysis. Evidences have been found of a compact network containing different components. This is interpreted as the result of a plurality of perspectives about the appropriate methods for the investigation of problems and the construction of theories within the domain of economics |
| Keywords: | Networks; Economic journals; Editorial boards; Interlocking editorship |
| JEL: | A |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:532&r=net |
| By: | Fershtman, Chaim; Gandal, Neil |
| Abstract: | The open source model is a form of software development with source code that is typically made available to all interested parties. At the core of this process is a decentralized production process: open source software development is done by a network of unpaid software developers. Using data from Sourceforge.net, the largest repository of Open Source Software (OSS) projects and contributors on the Internet, we construct two related networks: A Project network and a Contributor network. Knowledge spillovers may be closely related to the structure of such networks, since contributors who work on several projects likely exchange information and knowledge. Defining the number of downloads as output we finds that (i) additional contributors are associated with an increase in output, but that additional contributors to projects in the giant component are associated with greater output gains than additional contributors to projects outside of the giant component; (ii) Betweenness centrality of the project is positively associated with the number of downloads. (iii) Closeness centrality of the project appears also to be positively associated with downloads, but the effect is not statistically significant over all specifications. (iv) Controlling for the correlation between these two measures of centrality (betweenness and closeness), the degree is not positively associated with the number of downloads. (v) The average closeness centrality of the contributors that participated in a project is positively correlated with the success of the project. These results suggest that there are positive spillovers of knowledge for projects occupying critical junctures in the information flow. When we define projects as connected if and only if they had at least two contributors in common, we again find that additional contributors are associated with an increase in output, and again find that this increase is much higher for projects with strong ties than other projects in the giant component. |
| Keywords: | Microstructure of Collaboration; network; open source |
| JEL: | L17 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6789&r=net |
| By: | Robin Cowan; Nicolas Jonard |
| Abstract: | Network formation is often said to be driven by social capital considerations. A typical pattern observed in the empirical data on strategic alliances is that of small world networks: dense subgroups of firms interconnected by (few) clique-spanning ties. The typical argument is that there is social capital value both to being embedded in a dense cluster, and to bridging disconnected clusters. In this paper we develop and analyze a simple model of joint innovation where we are able to reproduce these features, based solely on the assumption that successful partnering demands some intermediate amount of similarity between the partners. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2008-06&r=net |
| By: | Krishnan, Pramila; Sciubba, Emanuela |
| Abstract: | In this paper we test the implications of a model of network formation on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes. Social capital matters, but its impact differs by the architecture of the network to which one belongs. |
| Keywords: | Endogenous network formation; rural institutions; social networks |
| JEL: | D85 O12 O17 Z13 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6787&r=net |
| By: | Cuberes, David |
| Abstract: | This paper analyzes the process of Internet diffusion across the world using a panel of 199 countries during the time interval 1990-2004. We 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 and equivalent to a right shift of the high income countries diffusion curve. The estimated diffusion curves provide evidence of a “catching up” process, although a very slow one. We next explore the determinants of Internet diffusion at the country level and across the same income groups. Our most novel finding is that network effects seem to be crucial—the number of Internet users in a country at a given year is positively associated with the number of users in the previous year. We also find that the degree of competition in the provision of Internet contributes positively to its diffusion and we also identify significant positive language externalities. |
| Keywords: | Technological diffusion; Internet; S-shape curve; Network externalities; Digital divide |
| JEL: | O57 O33 O14 |
| Date: | 2008–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8433&r=net |
| By: | Mamata Parhi |
| Abstract: | The inherent complexity of the innovation process puts interaction among firms and their specificities concerning the patterns of interaction at the center-stage. Hence, an uncovering of the interactive pattern among firms in the industry may reveal many hidden patterns, viz., the existing dependence and dominance structure of firms and the evolving dynamical changes based their on. Guided by these, this paper studies the vertical relational structure of automotive and auto component firms in Indian automotive supply chain where a clear ‘unequal balance of power’ is observed. We find that the industry network shows some prominent scale-free structural properties and complex dynamical behaviour. While analyzing further the Indian automotive industry’s possible evolutionary features we draw innovation and sustainability characteristics of this network, its inclination towards vulnerability and other policy implications. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2008-08&r=net |
| By: | Krug, B.; Hendrischke, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | We start our exploration of China’s institutional change by asking what the China experience can tell us about institutional economics and organization theory. We point to under-researched areas such as the formation of firms and the interplay between firms and local politics. Our findings support the dynamic capability approach which concentrates on activities rather than on pre-defined groups and models institution building as a co-operative game between the local business community and local government agencies. We find that the analysis of firms has to set in before they are formed by entrepreneurs and networks and we identify political management as a core competence of these two groups. While this contradicts the conventional view of clientelism or principle agent relations as institutional building blocks, we don’t propose competing models. Instead, we suggest focusing on a dynamic process in which the role of players can change. Faced with the spontaneous emergence of institutions, our concept of institutional architecture captures the fact that the two models can co-exist side by side and that, once the dichotomy between formal and informal institutions is given up, there can be a transition from local patron-client relations to local business-state coordination. |
| Keywords: | institutional change;entrepreneurship;networks;dynamic capabilities;diversity and convergence of institutions |
| Date: | 2008–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765012191&r=net |