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on Network Economics |
| By: | Sjaak Hurkens; Ángel L. López |
| Abstract: | We re-examine the literature on mobile termination in the presence of network externalities. Externalities arise when firms discriminate between on- and off-net calls or when subscription demand is elastic. This literature predicts that profit decreases and consumer surplus increases in termination charge in a neighborhood of termination cost. This creates a puzzle since in reality we see regulators worldwide pushing termination rates down while being opposed by network operators. We show that this puzzle is resolved when consumers' expectations are assumed passive but required to be fulfilled in equilibrium (as defined by Katz and Shapiro, AER 1985), instead of being rationally responsive to non-equilibrium prices, as assumed until now. |
| Keywords: | Networks, Rational Expectations, Access Pricing, Interconnection, Regulation, Telecommunications |
| JEL: | D4 K23 L51 L96 |
| Date: | 2010–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:812.10&r=net |
| By: | Marco Galbiati; Simone Giansante |
| Abstract: | This paper develops and simulates a model of emergence of networks in an interbank, RTGS payment system. A number of banks, faced with random streams of payment orders, choose whether to link directly to the payment system, or to use a correspondent bank. Settling payments directly via the system imposes liquidity costs, which depend on the maximum liquidity overdraft incurred during the day. On the other hand, using a correspondent entails paying a flat fee, charged by the correspondent to recoup liquidity costs and to extract a profit. We specify a protocol whereby banks sequentially choose whether to link directly to the system or to become clients of other banks, thus generating a client-correspondent network. We calibrate our model on real data on the UK payment system, and we compare the networks it produces with i) the true client-correspondent network, ii) the outcomes of two ‘dummy' benchmark models. The model is found to outperform the benchmarks. Its predicted networks reproduce some key features of the real UK network. |
| Keywords: | RTGS, network formation, tiering, correspondent bank, Nash bargaining. |
| JEL: | C7 G2 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:usi:depfid:0110&r=net |
| By: | Martha Prevezer; Pietro Panzarasa; Tore Opsahl |
| Abstract: | This study examines the spatial distribution and social structure of processes of learning and knowledge creation within the context of the inventor network connecting Chinese patent teams. Results uncover mixed tendencies toward both geographic co-location and dispersion arising from combined processes of intra-cluster learning and extra-cluster networking. These processes unfold within a social network that becomes less fragmented over time: as a giant component emerges and increases in size, social distances among inventors become longer. The interplay between geographic and network proximity is assessed against China’s institutional environment. Implications of the findings are discussed for regional development and policy-making. |
| Keywords: | clusters; knowledge transfer; social networks; patenting |
| JEL: | L11 M13 O53 R12 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:32&r=net |
| By: | Rachel LEVY (LEREPS); Damien TALBOT (GREThA UMR CNRS 5113) |
| Abstract: | The objective of this paper is to determine how the proximity in its various dimensions (geographical and organisational in particular) supports the relations of control between actors. Based on an empirical analysis of the network of collaboration of the competitiveness cluster Aerospace Valley, we propose indicators allowing to clarify this control. This analysis enables us to identify the actors in position to exert this control in the cluster. By using centrality indicators of the actors within the network, we could observe the position of control of certain establishments and groups in the cluster. We show that the historically central actors preserve the control of the relations within the cluster, characterized by a geographical proximity between the partners. We also show that major suppliers, such as Safran or Thales, exert a control more targeted through a strategic management of the collaborations portfolio of their establishments. Lastly, the public laboratories and the universities occupy a place of intermediary in the network of innovation. |
| Keywords: | proximities, control, competitiveness cluster, network, aeronautics |
| JEL: | L14 R38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2010-08&r=net |
| By: | Arnab Bhattacharjee; Sean Holly |
| Abstract: | While much of the literature on cross section dependence has fo?cused mainly on estimation of the regression coefficients in the under?lying model, estimation and inferences on the magnitude and strength of spill-overs and interactions has been largely ignored. At the same time, such inferences are important in many applications, not least because they have structural interpretations and provide useful inter?pretation and structural explanation for the strength of any interac?tions. In this paper we propose GMM methods designed to uncover underlying (hidden) interactions in social networks and committees. Special attention is paid to the interval censored regression model. Our methods are applied to a study of committee decision making within the Bank of England¡¯s monetary policy committee. |
| Keywords: | Committee Decision Making, Social Networks, Cross Section and Spatial Interaction, Generalised Method of Moments, Censored Regression Model, Expectation-Maximisation Algorithm, Monetary Policy, Interest Rates. |
| JEL: | D71 D85 E43 E52 C31 C34 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmawp:1004&r=net |