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on Network Economics |
| By: | Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN)); Tåg, Joacim (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Why do so many high-priced acquisitions of entrepreneurial firms take place in network industries? We develop a theory of commercialization (entry or sale) in network industries showing that high equilibrium acquisition prices are driven by the incumbents' desire to prevent rivals from acquiring innovative entrepreneurial firms. This preemptive motive becomes more important when there is an increase in network effects. A consequence is higher innovation incentives under an acquisition relative to entry. A policy enforcing strict compatibility leads to more entry, but can be counterproductive by reducing bidding competition, thereby also reducing acquisition prices and innovation incentives. |
| Keywords: | Acquisitions; Commercialization; Compatibility; Entry; Network effects; Innovation; R&D; Regulation |
| JEL: | L10 L15 L26 L50 L86 O31 |
| Date: | 2011–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0867&r=net |
| By: | Henze, B.; Noussair, C.N.; Willems, Bert (Tilburg University, Center for Economic Research) |
| Abstract: | This paper reports the results of an experiment evaluating three regulatory schemes for network infrastructure, in terms of their ability to generate efficient levels of capacity investment. We compare the performance of (1) price cap regulation, (2) a regulatory holiday for new capacity, and (3) price cap regulation with long term contracts combined with a secondary market. We find that the price cap regulation outperforms the regulatory holiday as the latter creates an incentive to underinvest relative to optimal levels. Long term contracts also fail to improve on single price-cap regulation, and can provide more noisy signals about future demand and thus reduce investment. |
| Keywords: | Infrastructure Investment;Experiment;Price Cap;Regulatory Holiday |
| JEL: | C9 L51 L95 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011035&r=net |
| By: | Harmsen-van Hout Marjolein J.W.; Herings P. Jean-Jacques; Dellaert Benedict G.C. (METEOR) |
| Abstract: | We propose a model on strategic formation of communication networks with (i) link specificity: the more direct links somebody maintains, the less she can specify her attention per link, the lower her links’ value, while this negative externality was previously ignored in the communication context, and (ii) value transferability via indirect links for informational but not for social value from communication, while this positive externality was modeled uniformly before. Assuming only social value to isolate the impact of link specificity, the pairwise stable set includes many nonstandard networks under high or particular combinations of fully connected components under low link specificity. Allowing for social and informational value, the joint effect of link specificity and value transferability reduces the stable set to certain fragmented networks under high or the complete network under low link specificity. These extremes are beneficial for efficiency, whereas quite inefficient networks may arise for intermediate link specificity. |
| Keywords: | microeconomics ; |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2011022&r=net |
| By: | Antoci Angelo; Sabatini Fabio; Sodini Mauro |
| Abstract: | Empirical studies have documented a decline in indicators of social participation in the last decades. The responsibility of social disengagement has been often attributed to pervasive busyness and the rising pressure of time. In this paper we argue that computer-mediated interaction, and particularly online networking, can help mitigate this downward trend. We develop a logical framework for assessing the role of the internet in the evolution of social participation. We analyze an economy where agents can develop their social interactions through two main modes of participation, one encompassing both online networking and face to face interactions, and another solely based on physical encounters. We study the interdependence between the rise in the pressure of time and the variation in the relative performance of the two strategies of participation. |
| Keywords: | Internet, computer-mediated communication, online networking, Facebook, social networks, social capital |
| JEL: | O33 Z13 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0072&r=net |
| By: | Tremewan, James |
| Abstract: | This paper is an experimental study on the effect of group identity on the formation of coalitions and the resulting distribution of resources. After inducing group identity based on preferences over paintings, subjects play symmetric three-player _divide the dollar_ games with a majority rule decision process. The main finding is that where two players are from one group and one from the other, those in the minority earn significantly less than majority players. This is largely a result of a two-way split between majority players occurring more frequently, either because of the increased salience of this outcome, or a shift in social preferences. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1020&r=net |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | We study and compare two frameworks: a model of influence, and command games. In the influence model, in which players are to make a certain acceptance/rejection decision, due to influence of other players, the decision of a player may be different from his inclination. We study a relation between two central concepts of this model: influence function, and follower function. We deliver sufficient and necessary conditions for a function to be a follower function, and we describe the structure of the set of all influence functions that lead to a given follower function. In the command structure introduced by Hu and Shapley, for each player a simple game called the command game is built. One of the central concepts of this model is the concept of command function. We deliver sufficient and necessary conditions for a function to be a command function, and describe the minimal sets generating a normal command game. We also study the relation between command games and influence functions. A sufficient and necessary condition for the equivalence between an influence function and a normal command game is delivered. |
| Keywords: | influence function, follower function, lower and upper inverses, kernel, command game, command function, minimal sets generating a command game |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00583867&r=net |
| By: | Béal, Sylvain; Rémila, Eric; Solal, Philippe |
| Abstract: | This article shows that, for any transferable utility game in coalitional form with nonempty coalition structure core, the number of steps required to switch from a payoff configuration out of the coalition structure core to a payoff configuration in the coalition structure core is less than or equal to (n*n+4n)/4, where n is the cardinality of the player set. This number considerably improves the upper bound found so far by Koczy and Lauwers (2004). |
| Keywords: | coalition structure core; excess function; payoff configuration; outsider independent domination. |
| JEL: | C71 |
| Date: | 2011–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29755&r=net |
| By: | De Sousa, José; Mirza, Daniel; Verdier, Thierry |
| Abstract: | We study the impact of transnational terrorism diffusion on security and trade. We set a simple theoretical model predicting that the closer a country to a source of terrorism, the higher the negative spillovers on its trade. The idea is that security measures, which impede trade, are directed both against the source country of terror and its neighbor countries where terrorism may diffuse. In contrast, we demonstrate that countries located far from terror could benefit from an increase in security by trading more. Taken to the test, we empirically document these predictions. We find (1) a direct negative impact of transnational terrorism on trade; (2) an indirect negative impact emanating from terrorism of neighbor countries; and (3) that trade is increasing with remoteness to terror. These results are robust to various definitions of the neighboring relationships among countries. |
| Keywords: | Terrorism; Trade; Security |
| JEL: | F12 F13 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1017&r=net |
| By: | Giacomo Degli Antoni; Lorenzo Sacconi |
| Abstract: | Social capital and corporate social responsibility (CSR) have received increasing attention in research on the role that elements such as trust, trustworthiness and social norms of reciprocity and cooperation may have in promoting socio-economic development. Although social capital and CSR seem to have features in common, their relationship has not yet been analysed in depth. This paper investigates the idea of a virtuous circle between the level of social capital and the implementation of CSR practices that fosters the creation of cooperative networks between the firm and all its stakeholders. By using both a theoretical approach developed by considering tools of network analysis and psychological game theory and an empirical approach based on original evidence from three case studies, this study shows the role that cognitive social capital (understood as a disposition to conform with ethical principles of cooperation) and the adoption of CSR practices may have in promoting the emergence of sustainable networks of relations between the firm and all its stakeholders (structural social capital). |
| Keywords: | Social capital, Corporate Social Responsibility, Social norms, Network, Cooperation, Trust |
| JEL: | A13 D23 L21 M14 Z10 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:1103&r=net |