nep-net New Economics Papers
on Network Economics
Issue of 2010‒11‒13
ten papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Network Neutrality or Internet Innovation? By Yoo, Christopher S.
  2. The Effect of Content on Global Internet Adoption By Nicholas Economides; V. Brian Viard
  3. Some Inquiries to Spontaneous Opinions: A case with Twitter in Indonesia By Maulana, Ardian; Situngkir, Hokky
  4. Network performance - What influences it? By Lefebvre, Virginie M.; Molnar, Adrienn; Gellynck, Xavier
  5. Network connections and innovation capacity in traditional agrifood chains By Kuhne, Bianka; Gellynck, Xavier; Weaver, R.D.
  6. Cascades in Networks and Aggregate Volatility By Daron Acemoglu; Asuman Ozdaglar; Alireza Tahbaz-Salehi
  7. Access regulation, competition, and broadband penetration: an international study By Bouckaert J.; van Dijk Th.; Verboven F.
  8. Completeness, interconnectedness and distribution of interbank exposures: A parameterized analysis of the stability of financial networks By Sachs, Angelika
  9. Getting beer during commercials: adverse effects of ad-avoidance By Stühmeier, Torben; Wenzel, Tobias
  10. Connectivity of vehicular ad hoc networks with continuous node distribution patterns By Jin, W L; Wang, Bruce

  1. By: Yoo, Christopher S.
    Abstract: Over the past two decades, the Internet has undergone an extensive re-ordering of its topology that has resulted in increased variation in the price and quality of its services. Innovations such as private peering, multihoming, secondary peering, server farms, and content delivery networks have caused the Internet’s traditionally hierarchical architecture to be replaced by one that is more heterogeneous. Relatedly, network providers have begun to employ an increasingly varied array of business arrangements and pricing. This variation has been interpreted by some as network providers attempting to promote their self interest at the expense of the public. In fact, these changes reflect network providers’ attempts to reduce cost, manage congestion, and maintain quality of service. Current policy proposals to constrain this variation risk harming these beneficial developments.
    Date: 2010–04
  2. By: Nicholas Economides (Stern School of Business, NYU); V. Brian Viard (Faculty of Laws, University College London)
    Abstract: We test the effect of content availability on Internet adoption across countries. Controlling for the endogeneity of content with respect to the installed base of Internet users and a host of demographic, economic and infrastructure factors, content has a statistically and economically significant effect. Since content is more easily and quickly altered than these other factors, our results suggest that policies promoting content creation will positively affect Internet diffusion even in the short run. Our results also suggest that, given its ubiquity, Internet content is a useful tool to affect social change across countries. Content has a greater effect on adoption in countries with more disparate languages, consistent with its use to overcome linguistic isolation, and in countries with international Internet gateways, suggesting the importance of infrastructure to deliver content.
    Keywords: Internet, technology adoption, economic development, two-sided markets,network effects, technology diffusion, language, content
    JEL: O30 O57 L86 L96
    Date: 2010–11
  3. By: Maulana, Ardian; Situngkir, Hokky
    Abstract: The paper discusses opportunities to utilize the series of micro-blogs as provided by the Twitter in observation of opinion dynamics. The spontaneity of tweets is more, as the service is attached more to the mobile communications. The extraction of information in the series of tweets is demonstrated as in conceptual map and mention map. From the latter, the social network stylized properties, i.e.: power law distribution is shown. The exemplification of the methodology is on the 82nd commemoration of Indonesian Youth Pledge and the participatory movement of Indonesian capitol city, Jakarta.
    Keywords: Twitter; social network; social media; text analysis; conceptual map; mention map.
    JEL: C90 C19 D85 H70 D71 C78 C65 C02 H83 D72 D78 D83 E61 A14
    Date: 2010–10–30
  4. By: Lefebvre, Virginie M.; Molnar, Adrienn; Gellynck, Xavier
    Abstract: The aim of this paper is to examine the literature addressing network performance and the factors influencing it. Design â 29 papers published in 18 different journals were systematically reviewed through a multidimensional classification framework based on the strategy-structure-performance paradigm of strategic management. Findings â Based on the outputs of the literature review, a conceptual framework describing network performance is proposed. Following this framework, it is suggested that network performance is the result of the combination of network strategy, network structure and external environmental factors, and not solely the result of network structure which is characterized by five structural elements i.e. network configuration, network membership, network tie, network management and network governance. Moreover, the framework suggests that, in equal context i.e. same network strategy and same external environment, different combinations of these five structural elements lead to different network performance. Implications â Based on these findings, adequate network performance measurement system should include determinants at the level of the network strategy and network structure but also at the level of the external environment. Scope for future research â This study should be extended in order to further investigate the relationships between network strategy and network structure on the one hand and environmental factors on the other hand, but also to further investigate the network strategy, network structure and environmental factors themselves.
    Keywords: Performance, network, strategy-structure-performance paradigm, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital,
    Date: 2010–10–27
  5. By: Kuhne, Bianka; Gellynck, Xavier; Weaver, R.D.
    Abstract: In the New Economy, the network is considered as more important than the firm itself. In this paper the focus is on chain networks which include vertical networks among chain members, horizontal networks with peers, and networking with third parties. Networks have an important role in the diffusion and adoption of innovations, thus they are the locus of innovation. While previous research focused on the firm, we contribute to the understanding of innovations in chain networks, i.e. we investigate the innovation capacity in vertical networks and how networking with peers and third parties is influencing the innovation capacity of the vertical network. We propose that there is a positive relationship between the network connections the direct chain partners have with peers and third parties and the innovation capacity of the vertical network. Data were collected from 90 direct agrifood chains in the traditional food sector. Cluster analysis suggested three clusters of chains corresponding to three distinct levels of innovation capacity: low, medium and high. Via descriptive analysis and binary logistic regression the influence of networking with peers and third parties on the innovation capacity of the vertical network was investigated. Our results confirm our proposition. However, we found that the chain partners are either horizontally or vertically networking for innovation. Nevertheless, more networking within the chain and with peers and third parties is linked to higher levels of innovation capacity. Consequently, our study adds to the research in the field of the New Economy by deepening the understanding of how innovation capacity is developed in vertical networks. We can confirm that the network is very important for the development and implementation of innovations and that the innovation capacity of one firm is linked to the innovation capacity of its chain partners. For future research we propose to investigate the link between networking for innovation and types of innovation which can be achieved. Further, future research should explore further inter-organizational links in the chain network and explore wider networks than the direct chain.
    Keywords: SMEs, chain networks, traditional food products, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital,
    Date: 2010–10–27
  6. By: Daron Acemoglu; Asuman Ozdaglar; Alireza Tahbaz-Salehi
    Abstract: We provide a general framework for the study of cascade effects created by interconnections between sectors, firms or financial institutions. Focusing on a multi sector economy linked through a supply network, we show how structural properties of the supply network determine both whether aggregate volatility disappears as the number of sectors increases (i.e., whether the law of large numbers holds) and when it does, the rate at which this happens. Our main results characterize the relationship between first order interconnections (captured by the weighted degree sequence in the graph induced by the input-output relations) and aggregate volatility, and more importantly, the relationship between higher-order interconnections and aggregate volatility. These higher-order interconnections capture the cascade effects, whereby low productivity or the failure of a set of suppliers propagates through the rest of the economy as their downstream sectors/firms also suffer and transmit the negative shock to their downstream sectors/firms. We also link the probabilities of tail events (large negative deviations of aggregate output from its mean) to sector-specific volatility and to the structural properties of the supply network.
    JEL: C67 D57 E32
    Date: 2010–11
  7. By: Bouckaert J.; van Dijk Th.; Verboven F.
    Abstract: The evolution of broadband penetration has shown substantial differences between OECD countries. This paper empirically investigates to what extent different forms of regulated competition explain these international differences. Three modes of competition are distinguished between broadband internet access providers that result from regulatory policies: (1) inter-platform competition; (2) facilities-based intra-platform competition; and (3) service-based intra-platform competition. In most countries these forms of competition co-exist although their intensity varies from country to country. Intra-platform competition may differ among countries depending on the degree of mandatory access obligations imposed by the regulator on the dominant network firm. Based on a sample of OECD countries, inter-platform competition has been a main driver of broadband penetration. The two types of intra-platform competition have a considerably smaller effect on broadband penetration. Linking these findings back to access regulation suggests that the “stepping stone” or “ladder of investment” theories might not provide the justification to impose extensive mandatory access obligations on DSL incumbents.
    Date: 2010–08
  8. By: Sachs, Angelika
    Abstract: This paper assesses the impact of a certain structure of interbank exposures on the stability of a stylized financial system. Given a certain balance sheet structure of financial institutions, a large number of valid matrices of interbank exposures is created by a random generator. Assuming a certain loss given default, domino effects are simulated. The main results are, first, that financial stability depends not only on the completeness and interconnectedness of the network but also on the distribution of interbank exposures within the system (measured by entropy). Second, looking at random graphs, the sign of the correlation between the degree of equality of the distribution of claims and financial stability depends on the connectivity of the financial system as well as on additional parameters that affect the vulnerability of the system to interbank contagion. Third, the more concentrated assets are within a money center model, the less stable it is. Fourth, a money center model with asset concentration among core banks is less stable than a random graph with banks of homogeneous size. Results obtained in this paper extend existing theoretical literature that exclusively focuses on completeness and interconnectedness of the network as well as empirical literature that exclusively focuses on one particular financial network. --
    Keywords: domino effects,interbank lending,financial stability,contagion
    JEL: C63 G21 G28
    Date: 2010
  9. By: Stühmeier, Torben; Wenzel, Tobias
    Abstract: This paper studies the impact of ad-avoidance behavior in media markets. We consider a situation where viewers can avoid advertisement messages. As the media market is a two-sided market, increased ad-avoidance reduces advertisers' value of placing an ad. We contrast two financing regimes, free-to-air and pay-TV. We find that a higher viewer responsiveness to advertising decreases revenues and entry in the free-to-air regime. In contrast, in the pay-TV regime, lower income from advertisements is compensated by higher subscription income leaving revenues and the number of channels unaffected for a fixed total viewership. --
    Keywords: Media Markets,Ad-avoidance,Two-Sided Markets
    JEL: L11 L13
    Date: 2010
  10. By: Jin, W L; Wang, Bruce
    Abstract: The connectivity of vehicular ad hoc networks (VANets) can be affected by the special distribution patterns, usually dependent and non-uniform, of vehicles in a transportation network. In this study, we introduce a new framework for computing the connectivity in a VANet for continuous distribution patterns of communication nodes on a line in a transportation network. Such distribution patterns can be estimated from traffic densities obtained through loop detectors or other detectors. When communication nodes follow homogeneous Poisson distributions, we obtain a new closed-form solution to connectivity; when distribution patterns of communication nodes are given by spatial renewal processes, we derive an approximate closedform solution to the connectivity; and when communication nodes follow non-homogeneous Poisson distributions, we propose a recursive model of connectivity. For a shock-wave traffic, we demonstrate the consistency between analytical results with those simulated with ns-2, acommunication simulator. With the developed models, we also discuss the impacts on connectivity of road-side stations and different distribution patterns of vehicles. Given continuous traffic conditions, the connectivity model could be helpful for designing routing protocols in VANets and implementing vehicle-infrastructure integration systems. Limitations and future research related to this study are discussed in the conclusion section.
    Keywords: Vehicular ad hoc networks, Inter-vehicle communications, Instantaneous connectivity
    Date: 2010–08–01

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