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on Network Economics |
| By: | Baum, Joel (Rotman School of Management, University of Toronto); Cowan, Robin (UNU-MERIT, Maastricht University); Jonard, Nicolas (Universite du Luxembourg) |
| Abstract: | Empirical research on strategic alliances has focused on the idea that alliance partners are selected on the basis of social capital considerations. In this paper we emphasize instead the role of complementary knowledge stocks (broadly defined) in partner selection, arguing not only that knowledge complementarity should not be overlooked, but that is may be the true causal force behind alliance formation. To marshal evidence on this point, we design a simple model of partner selection in which firms ally for the purpose if learning and innovating, and in doing so create an industry network. We abstract completely from network-based structural and strategic motives for partner selection and focus instead on the idea that firms' knowledge bases must "fit" in order for joint learning and innovation to be possible, and thus for an alliance to be feasible. The striking result is what while containing no social capital considerations, the simple model replicates the firm conduct, network structure, and contingent effects of network position on performance observed and discussed in the empirical literature. |
| Keywords: | Network formation and dynamics, Innovation, Knowledge, Alliances |
| JEL: | D85 D24 L14 L24 O33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009022&r=net |
| By: | Andrea Galeotti; Christian Ghiglino; Francesco Squintani |
| Abstract: | We introduce a tractable model of cheap talk among players located on networks. In our model, a player can send a message to another player if and only if he is linked to him. We derive a sharp equilibrium and welfare characterization which reveals two basic insights. In equilibrium, the willingness of a player to communicate with a neighbor decreases with the number of opponents who communicate with the neighbor. The ex-ante equilibrium welfare of every player increases not only with the number of truthful reports transmitted in the network, but also when truthful reports are more evenly distributed across players. We apply our findings to the analysis of homophily in communities, to organization design, and to the study of endogenous network formation. Communication across communities decreases as communities become larger, and communication may be asymmetric: From large communities to small ones. In our set up, fully decentralized organizations maximize all players’ welfare. Further, decentralized networks, where information may flow asymmetrically, endogenously form in equilibrium. Finally, we introduce the possibility of public communication in networks, and identify conditions under which public communication Pareto dominates private communication. |
| Date: | 2009–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:668&r=net |
| By: | Geoffroy de Clippel; Roberto Serrano |
| Abstract: | We first observe that two of Maskin’s results do not extend beyond three players: we construct a four-player partition function with nonpositive externalities whose unique solution is inefficient, as well as a four-player characteristic function that has a unique efficient solution for each ordering of the players, but for which the payoff vector obtained by averaging these solutions over the different orderings does not coincide with the Shapley value. On the other hand, we reinforce Maskin’s insight that externalities may play a crucial role in generating inefficiency. Many existing solutions on how to share profits assume or derive the property of efficiency. Yet we argue that players may have an interest to choose with whom to bargain. We illustrate how this may trigger inefficiency, especially in the presence of externalities, even if bargaining among any group of agents results in an efficient distribution of the surplus they can produce. We also provide some sufficient conditions for efficiency. |
| Keywords: | externalities; coalition formation; Shapley value |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2008-16&r=net |
| By: | Mueller, Rolf A.E.; Buergelt, Doreen; Seidel-Lass, Linda |
| Abstract: | Judged by its currency, the supply chain is one of the more successful metaphors in economics. The metaphor borrows from mechanics the idea of the chain, that is something that consists of elements that are linked to each of their two immediate neighbors and which jointly provide a strong but flexible connection. The metaphor transplants the chain-idea into the sphere of economics where, before the introduction of supply chains, chains were, for most economists, things best left in the care of ironmongers. More than twenty years after its introduction the "supply chain"-metaphor appears to be losing its luster and a competition is underway in the literature where authors forge complicated arguments in support of metaphors which recognize that supply chains are not really linear chains but most often expansive networks (e.g. Lazzarini et al. 2001). For this reason the chief contenders for the pride of place seem to be neologisms such as "supply networks" or "net chains". It is not obvious to us that much will be gained by replacing chain-metaphors with network-metaphors. Few practitioners of procurement, logistics and marketing will have failed to notice that not all business arrangements are strictly chain-like and only the most unperceiving will be enlightened by the new network-metaphors. Because supply chains obviously are networks, chances are that network-metaphors will win many converts, at least for some time. |
| Keywords: | Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Industrial Organization, |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eea110:49883&r=net |
| By: | Engelseth, Per; Karlsen, Anniken |
| Abstract: | Through a discussion of peculiarities of food supply, involving focus on information connectivity, a preliminary framework is sought that underlines joint responsibility in a complete supply chain of actors working in network context to achieve safe, quality and economic provision of products to end-use. |
| Keywords: | Food chains and networks, Complete chain and network approach, Information connectivity, Enterprise modelling, Product traceability, Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Industrial Organization, |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eea110:49844&r=net |
| By: | Braga, Francesco; Antorini, Matteo; Gandolfi, Pietro |
| Abstract: | The Parma Agribusiness Research & Management Knowledge Network, PARMaKN (PKN in the article) is an innovative public-private partnership, focused on the development of advanced food and agribusiness management research and service activities. PKN was launched in Parma in July 2007 by Societaâ Parmense per gli Insediamenti Produttivi (SPIP), the economic development corporation of the City of Parma. This paper presents the vision, mission and medium term activity plan of PKN. |
| Keywords: | Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Industrial Organization, |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eea110:49771&r=net |