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on Network Economics |
| By: | Jullien, Bruno |
| Abstract: | This chapter provides a roadmap to the burgeoning literature on two-sided markets with a specific focus on BtoB market places. On-line intermediation involves two-sided network effects between buyers and sellers, and the implications for optimal BtoB platforms’ tariffs are discussed. The chapter discusses first the monopoly case, drawing attention to the distinction between upfront registration and transaction fees. Then the competitive case is discussed, with different degrees of differentiation, the distinction between single-homing and multi-homing, and different business models. The last section is devoted to non-price issues such as tying, the design of the matching process and the ownership structure. |
| Date: | 2010–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:23814&r=net |
| By: | Stijn FERRARI; Frank VERBOVEN |
| Abstract: | How does an upstream firm determine the size of its distribution network, and what is the role of vertical restraints? To address these questions we develop and estimate two models of outlet entry, starting from the basic trade-o¤ between market expansion and fixed costs. In the coordinated entry model the upstream firm sets a market-specific wholesale price to implement the first-best number of outlets. In the restricted/free entry model the upstream firm has insufficient price instruments to target local markets. It sets a uniform wholesale price, and restricts entry in markets where market expansion is low, while allowing free entry elsewhere. We apply the two models to magazine distribution. The evidence is more consistent with the second model where the upstream firm sets a uniform wholesale price and restricts the number of entry licenses. We use the model to assess the profitability of modifying the vertical restraints. A government ban on restriced licensing would reduce profits by a limited amount, so that the business rationale for restricted licensing should be sought elsewhere. Furthermore, introducing market-specific wholesale prices would implement the first-best, but the profit increase would be small, providing a rationale for the current uniform wholesale prices. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces10.19&r=net |
| By: | D'Exelle, Ben (University of East Anglia); Riedl, Arno (Maastricht University) |
| Abstract: | We explore network effects on generosity for different network dimensions. To this end we elicit multiple network dimensions (friendship, social support, economic exchange, etc.) in a rural village in the Southern hemisphere and measure generosity with a sequence of dictator games conducted in the field. We find that networks of different dimensions differ substantially in density, clustering, and centrality. When relating generosity to networks we observe that social distance only matters for friendship ties but that structural network variables are important in all network dimensions. Importantly, these effects are not invariant across different network dimensions. We also find that individual characteristics are unrelated with generosity per se but that they have strong explanatory power for network formation. |
| Keywords: | networks, generosity, network formation, experiments |
| JEL: | C72 C90 D64 L14 Z13 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5356&r=net |
| By: | Riedl Arno; Exelle Ben d (METEOR) |
| Abstract: | We explore network effects on generosity for different network dimensions. To this end weelicit multiple network dimensions (friendship, social support, economic exchange, etc.) in arural village in the Southern hemisphere and measure generosity with a sequence of dictatorgames conducted in the field. We find that networks of different dimensions differ substantially in density, clustering, and centrality. When relating generosity to networks we observe that social distance only matters for friendship ties but that structural network variables are important in all network dimensions. Importantly, these effects are not invariant across different network dimensions. We also find that individual characteristics are unrelated with generosity per se but that they have strong explanatory power for network formation. |
| Keywords: | microeconomics ; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2010065&r=net |
| By: | Schuster, Stephan |
| Abstract: | In this paper, a reinforcement learning version of the connections game first analysed by Jackson and Wolinsky is presented and compared with benchmark results of fully informed and rational players. Using an agent-based simulation approach, the main nding is that the pattern of reinforcement learning process is similar, but does not fully converge to the benchmark results. Before these optimal results can be discovered in a learning process, agents often get locked in a state of random switching or early lock-in. |
| Keywords: | agent-based computational economics; strategic network formation; network games; reinforcement learning |
| JEL: | C63 D85 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27388&r=net |
| By: | Giulia De Masi (Ocean Engineering Department (ENI)); Giorgia Giovannetti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Giorgio Ricchiuti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche) |
| Abstract: | In this paper, using the database ICE-Reprint, the network of Italian firms investing abroad is studied. This analysis focuses on some manufacturing sectors, highlighting the linkages among firms and detecting the key nodes of the system (both in terms of firms and countries of destination). Moreover, through the examination of affiliates' economic activity, different policies of internationalization among leaders emerge. |
| Keywords: | FDI, Economics Networks, Projected network |
| JEL: | F2 L1 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2010_17.rdf&r=net |
| By: | Aalbers, Rick (Atos Consulting); Koppius, Otto (RSM/Erasmus University); Dolfsma, Wilfred (RSM/Erasmus University) |
| Abstract: | Informal networks are often emphasized as facilitating knowledge transfer. However, we find that formal networks also contribute significantly to knowledge transfer, and in fact contribute more than informal networks. This is particularly the case when knowledge is transferred between units. Additional analysis shows a synergetic effect between formal and informal ties, which suggests that knowledge transfer effects that in previous studies were attributed to informal networks only, may in fact be caused by the combination of both formal and informal networks. We conclude that there is more than one path to transfer knowledge effectively. |
| Keywords: | Knowledge transfer; Formal networks; informal networks; multi-unit organizations. |
| JEL: | O30 |
| Date: | 2010–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2006_008&r=net |
| By: | Michel Le Breton (Universit de Toulouse 1, GREMAQ and IDEI, Toulouse, France); Juan D. Moreno-Ternero (U. de Mlaga, U. Pablo de Olavide y CORE, Universit catholique de Louvain); Alexei Savvateev (New Economic School, Moscow, Russia); Shlomo Weber (Southern Methodist University, USA, and the New Economic School, Moscow, Russia) |
| Abstract: | This article studies a model of coalition formation for the joint production (and finance) of public projects, in which agents may belong to multiple coalitions. We show that, if projects are divisible, there always exists a stable (secession-proof) structure, i.e., a structure in which no coalition would reject a proposed arrangement. When projects are indivisible, stable allocations may fail to exist and, for those cases, we resort to the least core in order to estimate the degree of instability. We also examine the compatibility of stability and fairness in metric environments with indivisible projects, where we also explore the performance of well-known solutions, such as the Shapley value and the nucleolus. |
| Keywords: | Stability, Fairness, Membership, Coalition Formation |
| JEL: | C71 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:10.16&r=net |