nep-net New Economics Papers
on Network Economics
Issue of 2010‒06‒11
five papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Trust in whole networks in the public and nonprofit sector: The impact of public sector characteristics? By A. WILLEM;
  2. Network formation with heterogeneous agents and absolute friction By J. VANDENBOSSCHE; T. DEMUYNCK;
  3. Why are good comparative studies of networks so rare? Practical lessons from a study on French clusters By Thierry Weil; Anna Glaser; Emilie-Pauline Gallié; Valérie Mérindol; Philippe Lefebvre; Frédérique Pallez
  4. Cores of games with positive externalities By CHANDER, Parkash
  5. The complex interaction between Global Production Networks, Digital Information Systems and International Knowledge Transfers By Jarle Hildrum; Dieter Ernst; Jan Fagerberg

  1. By: A. WILLEM;
    Abstract: This article argues that networks in the public and nonprofit sector have typical characteristics that might impede the functioning of whole networks and, in particular, the development of affect-based and cognition-based trust. Such characteristics are related to safeguarding public sector values, power imbalance due to the mandatory and vertical character of the network, and effectiveness of networks in the public and nonprofit sector. Network types (i.e. network-administrative organization, lead organization, and shared governance) are suggested as potential moderators in reducing dysfunctionalities in public and nonprofit networks. In a sample of 54 networks, the effects of the assumed network dysfunctionalities on the two types of trust in the different types of networks were studied using a multilevel approach. Findings indicated that especially flexibility in the networks was important. Several characteristics of public and nonprofit networks were less problematic than expected.
    Keywords: networks, network types, public and nonprofit sector, trust
    Date: 2010–03
    Abstract: We present a model of endogenous network formation with absolute friction and heterogeneous agents. The individual payoffs from a given network are determined by the difference of an agent specific utility function that depends on the number of his/her direct links and the sum of his/her link-costs. These link-costs decompose in a symmetric function that represents the social and geographical distance between the two agents and an agent specific function representing the partner’s wealth and status. From a theoretical point of view, we define a new stability concept that is situated between the notions of pairwise stability (see Jackson and Wolinsky (1996)) and strong stability (see Dutta and Mutuswami (1997)). We show that our model has a unique stable network and we demonstrate that it is also strongly stable. As such, we provide uniqueness and existence for a whole range of stability concepts situated between our new stability concept and strong stability. From a practical point of view, we provide an algorithm that reproduces this stable network from information on the individual payoff structure. We illustrate the use of this algorithm by applying it to an informal insurance data set from the village of Nyakatoke in rural Tanzania.
    Keywords: network formation, heterogeneity, absolute friction
    JEL: C62 C78 C79
    Date: 2010–02
  3. By: Thierry Weil (CERNA - Centre d'économie industrielle - Mines ParisTech); Anna Glaser (CERNA - Centre d'économie industrielle - Mines ParisTech); Emilie-Pauline Gallié (IMRI, Université Paris Dauphine - Institut pour le management de la recherche et de l'innovation - Université Paris Dauphine - Paris IX); Valérie Mérindol (IMRI - Université Paris Dauphine - Paris IX); Philippe Lefebvre (CGS - Centre de Gestion Scientifique - Mines ParisTech); Frédérique Pallez (CGS - Centre de Gestion Scientifique - Mines ParisTech)
    Abstract: French “competitiveness clusters” were set up in 2005 to strengthen cooperation between small and large enterprises, and training and research institutions working on similar topics and located in the same geographical area, with the aim of making this area more competitive and attractive through enhanced innovation. Our analysis of this set of about 70 apparently similar networks, on which much data were collected, has given us an opportunity to investigate the factors explaining the differences in their performance.
    Keywords: Clusters, networks, network performance, context, innovation policy
    Date: 2010
  4. By: CHANDER, Parkash (National University of Singapore and UniversitŽ catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)
    Abstract: This paper introduces a core concept, called the -core, in the primitive framework of a strategic game. For a certain class of strategic games, it is a weaker concept than the strong Nash equilibrium, but in general stronger than the conventional - and - cores. We argue that the coalition formation process is an infinitely repeated game and show that the grand coalition forms if the -core is nonempty. This is a weaker sufficient condition than the previous such condition (Maskin (2003, Theorem 4)). As an application of this result, it is shown that the - core of an oligopolistic market is nonempty and thus the grand coalition forms.
    Keywords: positive externalities, strategic game, core, repeated game, coalition formation
    JEL: C7 D62
    Date: 2010–01–01
  5. By: Jarle Hildrum; Dieter Ernst; Jan Fagerberg
    Abstract: Traditionally many studies of knowledge in economics have focused on localized networks and intra-regional collaborations. However, the rising frequency by which firms collaborate within the context of global networks of production and innovation, the increasingly intricate divisions of labor involved and the extensive use of the Internet to facilitate interaction are all relatively novel trends that underline the importance of knowledge creation and flows across different locations. Focusing on this topic, the present chapter examines the complex interactions between global production networks (GPN), digital information systems (DIS) and knowledge transfers in information technology industries. It seeks to disentangle the various conduits through which different kinds of knowledge are transferred within such networks, and investigate how recent generations of DIS are affecting those knowledge transfers. The paper concludes that the dual expansion of GPN and DIS is adding new complexity to the practice of innovation: To access knowledge necessary for sustained creativity firms often have to link up with remote partners in GPN, but to be able to absorb and utilize this knowledge, they also frequently have to engage in local interactive learning processes. These local- global linkages - and the various skills necessary to operate them - are strongly interdependent, mutually reinforcing and critical for the development and maintenance of innovation-based competitiveness.
    Date: 2010–04

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