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on Network Economics |
| By: | Tim Paul Thomes (School of Economics and Business Administration, Friedrich Schiller University Jena) |
| Abstract: | This paper presents a theory of vertically interrelated markets of identical fixed size under implementation of positive indirect network effects. By introducing two Salop circles, a two-sided market model is provided, where intermediaries of differentiated copyrights for intellectual property, like performing rights organizations or publishers, compete as oligopsonists for owners of the intellectual property and as oligopolists for the users of their blanket licenses. We demonstrate, that an increase in competition benefits either license users or copyright owners or harms both groups. Moreover, if license users gain from an increased market entry, the owners of the intellectual property have to incur losses and vice versa. |
| Keywords: | Vertical restraints, Indirect network effects, Copyright enforcement, Performing rights organizations, Music industry |
| JEL: | D43 L13 L44 L82 |
| Date: | 2010–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-056&r=net |
| By: | Erik Bohlin; Gary Madden; Aaron Morey |
| Abstract: | Scarce radio spectrum is assigned to mobile network operators (MNOs) by national regulatory authorities (NRAs). Spectrum is usually assigned by beauty contest or an auction. The process requires that winners make a payment to the government. MNOs seek scarce spectrum to enable the provision of wireless services for profit. While MNOs are imperfectly aware of their costs, NRAs rely solely on MNOs for this information. As such, NRAs set spectrum assignment conditions (including minimum bid price) largely ignorant of MNO operating conditions. This study examines the performance of 3G auction outcomes in terms of the prices paid by winners via an econometric analysis of a unique sample of national 3G spectrum auctions. These winning bids depend on national and mobile market conditions, spectrum package attributes, license process, and post-award operator requirements. Finally, model estimation accounts for the censored nature of these data. |
| Keywords: | Mobile telephone markets, spectrum allocation, spectrum bid price |
| JEL: | D44 L96 |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/55&r=net |
| By: | Hernández-Mireles, C. |
| Abstract: | In this article we put forward a model where aggregate sales are a function of the online search of potential consumers at many locations. We argue that a location may be influential because of its power to drive aggregate sales and this power may be dynamic and evolving in time. Second, the influential locations may produce spillover effects over their neighbors and hence we may observe clusters of influence. We apply Bayesian Variable Selection (BVS) techniques and we use Multivariate Conditional Autoregressive Models (MCAR) to identify influentials locations and their clustering. Our results indicate that the influential locations and their economic value (measured by search elasticities) vary over time. Moreover, we find significant geographical clusters of influential locations and the clusters composition varies during the life-cycle of the consoles. Finally, we find weak evidence that demographics explain the probability of a location to be influential. |
| Keywords: | diffusion;new products;variable selection;spatial modeling |
| Date: | 2010–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765019671&r=net |
| By: | Jean Michel Glachant; Michelle Hallack |
| Abstract: | Gas transportation networks exhibit a quite substantial variety of technical and economical properties ranges roughly from an entrenched natural monopoly to near to an open competition platform. This empirical fact is widely known and accepted. However the corresponding frame of network analysis is lacking or quite fuzzy. As an infrastructure, can a gas network evolve or not from a natural monopoly (an essential facility) to an open infrastructure (a “highway” facility)? How can it be done with the same transportation infrastructure components within the same physical gas laws? Our paper provides a unified analytical frame for all types of gas transportation networks. It shows that gas transport networks are made of several components which can be combined in different ways. This very “lego property” of gas networks permits different designs with different economic properties while a certain infrastructural base and set of gas laws is common to all transportation networks. Therefore the notion of “gas transportation network” as a general and abstract concept does not have robust economic properties. The variety and modularity of gas networks come from the diversity of components, the variety of components combinations and the historical inclusion of components in the network. First, a gas network can combine different types of network components (primary or secondary ones). Second, the same components can be combined in different ways (notably regarding actual connections and flow paths). Third, as a capital-intensive infrastructure combining various specific assets, gas transportation networks show strong “path dependency” properties as they evolve slowly over time by moving from an already existing base. The heterogeneity of gas networks as sets of components comes firstly from the heterogeneity of the network components themselves, secondly from the different possibilities to combine these components and thirdly from the ‘path dependence’ character of gas network constructions. These three characteristics of gas networks explain the diversity of economic proprieties of the existent gas networks going from natural monopoly to competitive markets. |
| Keywords: | gas transport networks, regulatory economics, network regulation |
| JEL: | L5 L29 D42 D61 D6 |
| Date: | 2010–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/42&r=net |