|
on Network Economics |
| By: | Rabah Amir (University of Luxembourg and University of Arizona); Natalia Lazzati (University of Arizona) |
| Abstract: | This paper provides a thorough analysis of oligopolistic markets with positive demand-side network externalities and perfect compatibility. The minimal structure imposed on the model primitives is such that industry output increases in a firmr's rivals' total output as well as in the expected network size. This leads to a generalized equilibrium existence treatment that includes guarantees for a nontrivial equilibrium, and some insight into possible multiplicity of equilibria. We formalize the concept of industry viability and show that it is always enhanced by having more firms in the market and/or by technological improvements. We also characterize the e¤ects of market structure on industry performance, with an emphasis on departures from standard markets. The approach relies on lattice-theoretic methods, which allow for a unified treatment of various general results in the literature on network goods. Several illustrative examples with closed-form solutions are also provided. |
| Keywords: | Network effects, demand-side externalities, monotone comparative statics, Cournot oligopoly, supermodularity |
| JEL: | C72 D43 L13 L14 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:10-16&r=net |
| By: | Chahira Mehouachi (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX); Véronique Perret (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX) |
| Abstract: | Many call for research invites for further investigation of the underlying processes, practices and specificities of governance in the network context. Through an examination of what governance involves and how does it occur in a French cluster of video game companies, our multimethod study provide useful insights in the functions and purposes of governance in an inter-organizational and collaborative context, the main tools and mechanisms that are being used and the structure supporting these purposes and mechanisms. Our findings shed also light upon the processual nature of governance in network context. Governance is a set of processes, or a “meta-process”, that are geared toward the creation, the maintenance and the evolution of collaboration relationships and the network as a collective actor. We refer to this process of governance functioning, evolution and continuous (re) evaluation as governance work. |
| Keywords: | network governance ; interorganizational networks ; video game industry ; creative industries |
| Date: | 2010–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00536292_v1&r=net |
| By: | Antoci, Angelo; Sabatini, Fabio; Sodini, Mauro |
| Abstract: | This paper proposes an evolutionary framework to explore the dynamics of social interaction in an environment characterized by online networking and increasing pressure on time. The model shows how time pressure encourages the choice to develop social interactions also through online networking instead of relying exclusively on face to face encounters. Our findings suggest that the joint influence exerted by the reduction in leisure time and the new opportunities of participation offered by web-mediated communication may progressively lead a growing share of the population to adopt networking sites as an indispensable environment for the development of interpersonal relationships. |
| Keywords: | internet; computer-mediated communication; social networking; online networks; Facebook; human interaction; social capital |
| JEL: | O33 Z13 D85 C73 |
| Date: | 2010–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27661&r=net |
| By: | Nicholas Economides (Stern School of Business, NYU); Benjamin Hermalin (Haas School of Business, U.C. Berkeley) |
| Abstract: | Pricing of Internet access has been characterized by two properties. Parties are directly billed only by the Internet Service Provider (ISP) through which they connect to the Internet and the ISP charges them on the basis of the amount of information transmitted rather than its content. These properties define a regime known as “network neutrality.” In 2005, some large ISPs proposed that application and content providers directly pay them additional fees for accessing the ISPs’ residential clients, as well as differential fees for prioritizing certain content. We analyze the private and social incentives to introduce such fees when the network is congested and more traffic implies delays. We find that network neutrality is welfare superior to bandwidth subdivision (granting or selling priority service). We also consider the welfare properties of the various regimes that have been proposed as alternatives to network neutrality. In particular, we show that the benefit of a zero-price “slow lane” is a function of the bandwidth the regulator mandates be allocated it. Extending the analysis to consider ISPs’ incentives to invest in more bandwidth, we show that, under general conditions, their incentives are greatest when they can price discriminate; this investment incentive offsets to some degree the allocative distortion created by the introduction of price discrimination. A priori, it is ambiguous whether the offset is sufficient to justify departing from network neutrality. |
| Keywords: | network neutrality, two-sided markets, Internet, monopoly, price discrimination, regulation, congestion |
| JEL: | L1 D4 L12 L13 C63 D42 D43 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1025&r=net |
| By: | Carlos Lever Guzmán |
| Abstract: | This paper proposes a model of voting competitions (political campaigns and strategic lobbying) where voters are influenced by the opinion of their neighbors on a social network. In the unique pure strategy nash equilibrium, resources are targeted toward individuals with an influential position in the network. This finding contrasts with previous theories of strategic spending which predict that parties (or lobbies) should spend more on individuals who have a higher probability of being pivotal for the vote. The paper then tests the model using data on campaign contributions by interests groups in the US. House of Representatives. The estimations show that both network influence and pivotality are significant predictors of campaign contributions. |
| Keywords: | Network games, strategic spending, Colonel Blotto games, counteractive lobbying, Bonacich centrality |
| JEL: | D85 D72 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2010-16&r=net |
| By: | Corinne Autant-Bernard (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France); Jean-Pascal Guironnet (Université de Caen, CREM CNRS 6211); Nadine Massard (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France) |
| Abstract: | Using a sample of 46 000 EU firms from the Community Innovation Survey, this paper analyses the drivers of innovation adoption. In contrast to most empirical studies on innovation diffusion in which a specific technology is analyzed, this study covers several countries and industries in the European Union. Following Van de Ven and Van Praag (1981), Heckman’s method is applied in a context of binary endogenous variable to explain the choices made by firms regarding innovation. Distinctions are made between the internal generation of innovation and the adoption of innovation produced by others, as well as between different types of adoption (product vs. process and cooperation-based adoption vs. isolated adoption). The study is focused on the impact of users’ features and their cooperation with suppliers on the adoption choices. The results point out that cooperation is a key driver of adoption choices. Usual determinants such as firm size, absorptive capability or exports would foster generation of innovation instead of adoption. |
| Keywords: | Innovation adoption, Innovation diffusion, Community Innovation Survey, Process adoption, Product adoption |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1034&r=net |