nep-net New Economics Papers
on Network Economics
Issue of 2010‒08‒28
seven papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Markets of information goods facing a strong P2P network By Yang Michael S.
  2. Internet access: where law, economy, culture and technology meet By Wong, Sulan; Altman, Eitan; Rojas-Mora, Julio
  3. Word of Mouth Advertising, Credibility and Learning in Networks By Chatterjee, Kalyan; Dutta, Bhaskar
  4. What drives patent performance of German biotech firms? The impact of R&D subsidies, knowledge networks and their location By Dirk Fornahl; Tom Broekel; Ron Boschma
  5. A model of influence in a social network By Michel Grabisch; Agnieszka Rusinowska
  6. Resilience of the Interbank Network to Shocks and Optimal Bail-Out Strategy: Advantages of "Tiered" Banking Systems By Mariya Teteryatnikova
  7. Greening Supply Chains: Impact on Cost and Design By Mallidis, I.; Vlachos, D.; Dekker, R.

  1. By: Yang Michael S. (METEOR)
    Abstract: This paper studies a traditional monopolistic market of information goods in the presenceof an inherently strong peer-to-peer file-sharing network. Specifically, such a strongnetwork is made possible by a few fanatic users who selflessly contribute to the sharingof files. We find that the most prevalent equilibrium outcome is the one where the firmaccommodates the network and competes in price. We establish that coordination failurein the forming of networks is not an issue once we consider a high level of taste heterogeneity and include such fanatic users in the model. We also find possible network-deterring market structures, although these can only happen under limited circumstances. Furthermore, it is not impossible to see the firm and the network co-existing as local monopolies not serving the entire market and therefore not competing. For this market structure to occur, the taste heterogeneity has to be very large. Finally, we find that in all the equilibrium structures, total welfare always decreases in taste heterogeneity and the generic cost factor of downloading.
    Keywords: microeconomics ;
    Date: 2010
  2. By: Wong, Sulan; Altman, Eitan; Rojas-Mora, Julio
    Abstract: Internet growth has allowed unprecedented widespread access to cultural creation including music and films, to knowledge, and to a wide range of consumer information. At the same time, it has become a huge source of business opportunities. Along with great benefits that this access to the Internet provides, the open and free access to the Internet has encountered large opposition based on political, economical and ethical reasons. An ongoing battle over the control on Internet access has been escalating on all these fronts. In this paper we describe first some of the ideological roots of free access to the Internet along with its main opponents. We then focus on the problem of “Internet piracy” and analyze the efficiency of efforts to reduce the availability of copyrighted creations that are available for non-authorized free download.
    Keywords: Internet access; fundamental rights; copyrights; public goods; commons
    JEL: O34 H41 K00
    Date: 2010–08–06
  3. By: Chatterjee, Kalyan (Department of Economics, The Pennsylvania State University); Dutta, Bhaskar (Department of Economics, University of Warwick)
    Abstract: Social networks representing the pattern of social interactions - who talks to or who observes whom- play a crucial role as a medium for the spread of information, ideas, diseases, products. Someone in the population may struck with an infection or may adopt a new technology, and it can then either die out quickly or spread throughout the population, depending possibly on the location of the initial appearance, the structure of the network - for instance, how dense it is. The dynamics of adoption -the extent to which individuals are in uenced by their neighbours, the impact of "word of-mouth" communication- also plays a role in determining the speed of diffusion. Given the large range of contexts in which social learning is important, it is not surprising that researchers from various disciplines have studied processes of diffusion from a variety of perspectives.
    Date: 2010
  4. By: Dirk Fornahl; Tom Broekel; Ron Boschma
    Abstract: This paper aims to explain whether firm-specific features, their engagement in collaboration networks and their location influence patent activity of biotech firms in Germany in the period 1997-2004. First, we demonstrate that non-collaborative R&D subsidies do not increase patent intensity of biotech firms. Second, the number of knowledge links biotech firms is also not influencing their patent performance. However, strong and robust evidence is found that some but not too much cognitive distance between actors involved in R&D collaborations increases patent performance of firms. Third, being located in a biotech cluster does positively impact on patent performance.
    Keywords: relatedness, R&D subsidies, biotechnology, knowledge networks, proximity paradox
    JEL: O33 O38 R58
    Date: 2010–08
  5. By: Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: In the paper, we study a model of influence in a social network. It is assumed that each player has an inclination to say YES or NO which, due to influence of other players, may be different from the decision of the player. The point of departure here is the concept of the Hoede-Bakker index - the notion which computes the overall decisional `power' of a player in a social network. The main drawback of the Hoede-Bakker index is that it hides the actual role of the influence function, analyzing only the final decision in terms of success and failure. In this paper, we separate the influence part from the group decision part, and focus on the description and analysis of the influence part. We propose among other descriptive tools a definition of a (weighted) influence index of a coalition upon an individual. Moreover, we consider different influence functions representative of commonly encountered situations. Finally, we propose a suitable definition of a modified decisional power.
    Keywords: influence function, influence index, decisional power, social network
    Date: 2010–07
  6. By: Mariya Teteryatnikova
    Abstract: This paper studies systemic risk and the scale of systemic breakdown in the frequently observed tiered banking system. The banking network is constructed from a number of banks which are linked by interbank exposures with a certain predefined probability. In this framework, the tiered structure is represented either by a network with negative correlation in connectivity of neighboring banks, or alternatively, by a network with a scale-free distribution of connectivity. The main findings of the paper highlight the advantages of tiering in terms of both the resilience of the banking network to systemic shocks and the extent of necessary government intervention should a crisis evolve.
    JEL: C63 D85 G21
    Date: 2010–02
  7. By: Mallidis, I.; Vlachos, D.; Dekker, R.
    Abstract: The consideration of environmental issues has emerged as a topic of critical importance for today’s globalized supply chains. The purpose of this paper is to develop a strategic-tactical decision-support methodology to assist managers in evaluating the impact of environmental issues, related to transportation emissions, on the transport geography of a region. Specifically we provide a tool that addresses: (i) supply chain network design, including port of entry and transportation mode, and (ii) decisions on leasing vs. outsourcing of transportation and distribution centers. The applicability of the proposed methodology is examined through the development of a sustainable supply chain network in the South-Eastern Europe region. The results indicate that in most cases outsourcing distribution centers to Third Party Logistics operators improves both the cost and the environmental performance of a company. In all cases outsourcing of transportation operations minimizes the amount of CO2 and PM emissions generated, while leasing minimizes costs.
    Keywords: supply chain sustainability;carbon footprint;supply chain design
    Date: 2010–08–16

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