nep-net New Economics Papers
on Network Economics
Issue of 2010‒09‒25
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Network industries and regulatory jurisdiction By Trillas, Francesc
  2. Key Players and Key Groups in Teams: A Network Approach Using Soccer Data By Sudipta Sarangi; Emre Unlu
  3. Contract Enforcement by the Gods By Schumacher, Heiner; Hadnes, Myriam
  4. Social Networks, Job Search Methods and Reservation Wages: Evidence for Germany By Marco Caliendo; Ricarda Schmidl; Arne Uhlendorff
  5. Identifying the Community Structure of the International-Trade Multi Network By Matteo Barigozzi; Giorgio Fagiolo; Giuseppe Mangioni
  6. Guanxi Management in Chinese Entrepreneurs: a Network Approach By Arribas Fernández Iván; Vila Gisbert José E.

  1. By: Trillas, Francesc (IESE Business School)
    Abstract: This paper presents new developments in the economics of federalism to analyze the determinants of specific investments in network industries and the interaction between structural and behavioral regulation. Central or federal policy making is more focused and specialized and makes it more difficult for interest groups to organize. Under some conditions, however, central powers will be associated with more underinvestment than local powers. The latter cannot afford specific regulation due to high fixed administrative costs, but may use other policy objectives as a commitment device. When technology allows the introduction of competition in some segments, the possibilities for organizing the institutional architecture of regulation expand. Liberalization will typically require institutional cooperation, but cooperation has costs and may be inhibited by distributional concerns.
    Keywords: Network Industries; Regulatory Jurisdiction; Cooperation; Liberalization;
    Date: 2010–05–05
  2. By: Sudipta Sarangi; Emre Unlu
    Abstract: This paper provides a way of evaluating a player's contribution to her team and relates her effort to her salaries. We collect data from UEFA Euro 2008 Tournament and construct the passing network of each team. Then we determine the key player in the game while ranking all the other players too. Next, we identify key groups of players to determine which combination of players played more important role in the match. Using 2010 market values and observable characteristics of the players, we show that players having higher intercentrality measures regardless of their field position have significantly higher market values.
    Keywords: Social networks, team game, centrality measures
    JEL: A14 C72 D85
    Date: 2010
  3. By: Schumacher, Heiner; Hadnes, Myriam
    Abstract: We propose a theory that explains why rational agents start to believe in a causal relationship between unrelated events. Agents send and collect messages through a communication network. If they are convinced of a relationship between two events, they send messages confirming their belief with higher probability than messages contradicting it. The network aggregates this communication bias over individuals. Therefore, agents may find a strong relationship between unrelated events even if the communication bias is very small. We apply this model to an informal economy where the fear of punishment by supernatural forces prevents agents from cheating others. --
    Keywords: Informal Contract Enforcement,Communication,Learning,Networks
    JEL: C72 L14
    Date: 2010
  4. By: Marco Caliendo; Ricarda Schmidl; Arne Uhlendorff
    Abstract: In this paper we analyze the relationship between social networks and the job search behavior of unemployed individuals. It is believed that networks convey useful information in the job search process such that individuals with larger networks should experience a higher productivity of informal search. Hence, job search theory suggests that individuals with larger networks use informal search channels more often and substitute from formal to informal search. Due to the increase in search productivity, it is also likely that individuals set higher reservation wages. We analyze these relations using a novel data set of unemployed individuals in Germany containing extensive information on job search behavior and direct measures for the social network of individuals. Our findings confirm theoretical expectations. Individuals with larger networks use informal search channels more often and shift from formal to informal search. We find that informal search is mainly considered a substitute for passive, less cost intensive search channels. In addition to that, we find evidence for a positive relationship between the network size and reservation wages.
    Keywords: job search behavior, unemployment, social networks
    JEL: J64
    Date: 2010
  5. By: Matteo Barigozzi; Giorgio Fagiolo; Giuseppe Mangioni
    Abstract: We study the community structure of the multi-network of commodity-specific trade relations among world countries over the 1992-2003 period. We compare structures across commodities and time by means of the normalized mutual information index (NMI). We also compare them with exogenous community structures induced by geographical distances and regional trade agreements. We find that commodity-specific community structures are very heterogeneous and much more fragmented than that characterizing the aggregate ITN. This shows that the aggregate properties of the ITN may result (and be very different) from the aggregation of very diverse commodity-specific layers of the multi network. We also show that commodity-specific community structures, especially those related to the chemical sector, are becoming more and more similar to the aggregate one. Finally, our findings suggest that geographical distance is much more correlated with the observed community structure than RTAs. This result strengthens previous findings from the empirical literature on trade.
    Keywords: Networks; Community structure; International-trade multi-network; Normalized mutual information
    JEL: F10 D85
    Date: 2010–09–15
  6. By: Arribas Fernández Iván (University of Valencia; Ivie); Vila Gisbert José E. (University of Valencia)
    Abstract: This working paper analyzes the role played by two dimensions of entrepreneurs’ private social capital in the performance of an entrepreneurial venture: local size and degree of preferential linking. To fulfill this objective, we build a bi-dimensional measure of social capital based on network models and a methodology to estimate this measure for any group of entrepreneurs. Based on a survey of service entrepreneurs who launched their business in the city of Shanghai, we show that social capital or guanxi is relevant for business success. Moreover, we show that roles played by each dimension are quite different. A large local network, i.e. a large set of agents able to advise or support the entrepreneur, increases the chances of survival of the new venture but has no impact to make it go beyond a self-employment business. To reach this level, entrepreneurs need to generate a high degree of preferential attachment; in other words, they need to generate a social network that allows them to get advice and support from those agents placed in critical positions within Shanghai’s global socio-economic network. This finding has relevant political and managerial implications and generates new questions to be answered in future research.
    Keywords: Social capital, network analysis, entrepreneurship in China
    Date: 2010–09–20

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