nep-net New Economics Papers
on Network Economics
Issue of 2008‒05‒17
four papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Networking and Developing Collaborative Alliances: The Impact of the Network on Joint Action By Claro, Danny P.; Claro, Priscila; Lazzarini, Sergio G.
  2. A Model of Tiered Settlement Networks By James Chapman; Jonathan Chiu; Miguel Molico
  3. Where Can Capabilities Come From? How the Content of Network Ties Affects Capability Acquisition By Ishtiaq P. Mahmood; Hong-Jin Zhu; Edward J. Zajac
  4. Complementarities, Below-Cost Pricing, and Welfare Losses By Vanessa von Schlippenbach

  1. By: Claro, Danny P.; Claro, Priscila; Lazzarini, Sergio G.
    Date: 2007–10
  2. By: James Chapman; Jonathan Chiu; Miguel Molico
    Abstract: This paper develops a model of settlement system to study the endogenous structure of settlement networks, and the welfare consequences of clearing agent failure. The equilibrium degree of tiering is endogenously determined by the cost structure and the information structure. The degree of tiering is decreasing in the fixed cost of operating the second-tier network and the availability of public credit history. Furthermore, the welfare effects of clearing agent failure can be decomposed into operational inefficiency and the loss of private information.
    Keywords: Payment, clearing, and settlement systems
    JEL: E42 E58 G21
    Date: 2008
  3. By: Ishtiaq P. Mahmood; Hong-Jin Zhu; Edward J. Zajac
    Abstract: While strategy researchers have devoted considerable attention to the role of firm-specific capabilities in the pursuit of competitive advantage, less attention has been directed at how firms obtain these capabilities from outside a firm’s boundaries. This study analyzes how firms’ network ties represent one important source of capability acquisition. Theoretically, we go beyond the traditional focus on network structure and offer a novel contingency model that specifies how differences in the content of network ties (e.g., buyer-supplier, equity, and director ties) will differentially affect the process of R&D capability acquisition. Empirically, we also seek to provide an original contribution to the capabilities literature by utilizing a stochastic frontier estimation to rigorously measure firm capabilities, and we demonstrate the value of this approach using longitudinal data on business groups in emerging economies. The supportive results of our analysis show that the effect of network ties on the acquisition of new affiliate capabilities is clearly and predictably contingent on the content of the ties.
    Date: 2008–04
  4. By: Vanessa von Schlippenbach
    Abstract: We analyze below-cost pricing in retail markets and examine its impact on social welfare as well as on suppliers' incentives to invest in quality. Considering negotiations about a linear wholesale price between the retailer and her suppliers, we find that below-cost pricing aggravates the double marginalization problem and causes welfare losses compared to a regime where below-cost pricing is banned. Furthermore, suppliers have stronger incentives to invest in high quality products if a ban of below-cost pricing is enforced.
    Keywords: Complementarities, Retailing, Below-Cost Pricing
    JEL: L22 L42
    Date: 2008

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