nep-net New Economics Papers
on Network Economics
Issue of 2011‒07‒13
nine papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Regulatory reforms of European network industries and the courts By Knieps, Günther
  2. Interbank Networks in Prewar Japan: Structure and Implications By Tetsuji Okazaki; Michiru Sawada
  3. Knowledge Sharing in Non-Knowledge Intensive Organizations: When Social Networks do not Matter? By Capellen, van der J.; Koppius, O.R.; Dittrich, K.
  4. Calling Circles: Network Competition with Non-Uniform Calling Patterns By Steffen Hoernig; Roman Inderst; Tommaso Valletti
  5. Network neutrality and the evolution of the internet By Knieps, Günter
  6. Price Competition on Network By Carlos Lever Guzmán
  7. The air connectivity index : measuring integration in the global air transport network By Arvis, Jean-François; Shepherd, Ben
  8. Next Generation Access Networks and Market Structure By OECD
  9. Intellectual Property Rights and South-North Formation of Global Innovation Networks By M. Comune; A. Naghavi; G. Prarolo

  1. By: Knieps, Günther
    Abstract: Regulatory reforms in European network industries are strongly influenced by legal decisions. The cases considered in this paper not only initiated the liberali-zation process of the markets for network services but also provided an impor-tant signaling function for the remaining regulatory problems: localization of network-specific market power, abolishment of grandfathering rights, ex ante regulation of network-specific market power instead of negotiated unregulated network access, incentive regulation instead of cost-based regulation. The process towards sector-symmetric market power regulation based on economi-cally founded principles gains increasing relevance. Nevertheless, there are fur-ther reform potentials to be exhausted in the future. --
    Date: 2010
  2. By: Tetsuji Okazaki (Faculty of Economics, University of Tokyo); Michiru Sawada (Nihon University)
    Abstract: In this paper, we explore the structure and implications of interbank networks in prewar Japan, focusing on director interlocking. We find that approximately half the banks had at least one connection with another bank through director interlocking, and that a bank that had connections with other banks was less likely to fail than a bank without a network. The quality of networks also matters in the sense that the failure probability of a bank with a network was negatively associated with the profitability of the connected banks. On the other hand, there is no strong evidence of financial contagion through networks. In addition, networks of director interlocking contributed to the stabilization of the financial system through coordinating bank mergers.
    Date: 2011–07
  3. By: Capellen, van der J.; Koppius, O.R.; Dittrich, K.
    Abstract: Considerable attention has been paid to the network determinants of knowledge sharing. However, most, if not all, of the studies investigating the determinants of knowledge sharing are either focused on knowledge-intensive organizations such as consultancy firms or R&D organizations, or knowledge workers in regular organizations, while lesser knowledge intensive organizations or non-knowledge workers are rarely explored. This is a gap in the literature on social networks and knowledge sharing. In this paper, the relations between network determinants and actor determinants of knowledge sharing are empirically tested by means of a network survey in a less knowledge intensive organization, specifically employees of a Dutch department store chain. The results show that individual-level variables such as departmental commitment and enjoyment in helping others are the major determinants of individuals’ knowledge sharing behavior, but none of the social network variables play a role. The results thus present an important boundary condition to social networks effects on knowledge sharing: social networks only seem to play a role in knowledge sharing for knowledge workers, not for blue-collar workers.
    Keywords: knowledge sharing;social networks;non-knowledge intensive organizations
    Date: 2011–05–13
  4. By: Steffen Hoernig (Universidade Nova de Lisboa and CEPR); Roman Inderst (University of Frankfurt (IMFS), Imperial College London and CEPR); Tommaso Valletti (Imperial College London, University of Rome II and CEPR)
    Abstract: We introduce a flexible model of telecommunications network competition with non-uniform calling patterns, which account for the fact that customers tend to make most calls to a small set of contacts. Equilibrium call prices are distorted away from marginal cost, and competitive intensity is affected by the concentration of calling patterns. Contrary to previous predictions, jointly profit-maximizing access charges are set above termination cost in order to dampen competition, and the resulting on-net prices are below off-net prices, if calling patterns are sufficiently concentrated. We discuss implications for regulating access charges as well as on- and off-net price discrimination.
    Keywords: Network competition; non-uniform calling patterns; termination charge
    JEL: L13 L51
    Date: 2011–07–04
  5. By: Knieps, Günter
    Abstract: In order to create incentives for Internet traffic providers not to discriminate with respect to certain applications on the basis of network capacity require-ments, the concept of market driven network neutrality is introduced. Its basic characteristics are that all applications are bearing the opportunity costs of the required traffic capacities. An economic framework for market driven network neutrality in broadband Internet is provided, consisting of congestion pricing and quality of service differentiation. However, network neutrality regulation with its reference point of the traditional TCP would result in regulatory micro-management of traffic network management. --
    Date: 2010
  6. By: Carlos Lever Guzmán
    Abstract: We present a model of imperfect price competition where not all firms can sell to all consumers. A network structure models the local interaction of firms and consumers. We find that aggregate surplus is maximized with a fully connected network, which corresponds to perfect competition, and decreases monotonically as the network becomes less connected until firms become local monopolists. When we study which networks are likely to form in equilibrium, we find that stable networks are not fully connected but are connected enough to rule out local monopolists. Our results extend to oligopolistic competition when consumers can either buy from a single firm or from all firms.
    Keywords: Network markets, price competition, oligopoly competition, Bertrand competition.
    JEL: D43 D85 L11 L13
    Date: 2011–07
  7. By: Arvis, Jean-François; Shepherd, Ben
    Abstract: The authors construct a new measure of connectivity in the global air transport network, covering 211 countries and territories for the year 2007. It is grounded in network analysis methods, and is based on a gravity-like model that is familiar from the international trade and regional science literatures. It is a global measure of connectivity, in the sense that it captures the full range of interactions among all network nodes, even when there is no direct flight connection between them. The best connected countries are the United States, Canada, and Germany; the United States'score is more than two-thirds higher than the next placed country's, and connectivity overall follows a power law distribution that is fully consistent with the hub-and-spoke nature of the global air transport network. The measure of connectivity is closely correlated with important economic variables, such as the degree of liberalization of air transport markets, and the extent of participation in international production networks. It provides a strong basis for future research in areas such as air and maritime transport, as well as international trade.
    Keywords: Transport Economics Policy&Planning,E-Business,Geographical Information Systems,Technology Industry,Airports and Air Services
    Date: 2011–06–01
  8. By: OECD
    Abstract: This report focuses on developments in broadband market structures emerging from the deployment of high-speed broadband services and the policy and regulatory implications.
    Date: 2011–06–20
  9. By: M. Comune; A. Naghavi; G. Prarolo
    Abstract: With the rise of the knowledge economy, delivering sound innovation policies requires a thorough understanding of how knowledge is produced and diffused. This paper takes a step to analyze a new form of globalization, the so-called system of Global Innovation Networks (GINs), to shed light on how the protection of intellectual property rights (IPRs) influences their creation and development. We focus on the role of IPR protection in fostering international innovative activities in emerging economies (South), such as China and India, and more generally, how IPRs affect the development of GINs between newly industrialized countries and OECD countries. Using both survey-based firm-level and country-level global data, we find IPRs to be an important determinant of participation in GINS from a Southern perspective. We find IPR protection at home and its harmonization across county pairs foster South-North formation of GINs. We also find that a stringent regime in the destination country discourages foreign international innovative activities that originate in NICs. Both levels of our analysis confirm the ICT industry, particularly the hardware segment, to rely on IPRs when engaging in the international outsourcing and offshoring of innovation or in patenting activities abroad.
    JEL: D23 F53 O34
    Date: 2011–06

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