nep-net New Economics Papers
on Network Economics
Issue of 2011‒11‒14
eight papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. To surcharge or not to surcharge? A two-sided market perspective of the no-surchage rule By Nicholas Economides; David Henriques
  2. International Research Networks in Pharmaceuticals: Structure and Dynamics By Uwe Cantner; Bastian Rake
  3. Strategies for Innovation Networks By Bode, Alexander; Alig, Simon
  4. Credibility and Strategic Learning in Networks By Chatterjee, Kalyan; Dutta, Bhaskar
  5. Collaborate at home to win abroad: How does access to local network resources influence export behavior? By Boehe, Dirk Michael
  6. Is the European R&D network homogeneous? spatial interaction modeling of network communities determined using graph theoretic methods By Michael Barber; Thomas Scherngell
  7. Conceptualizing the Role of Geographical Proximity in Project Based R&D Networks: A Literature Survey By Cilem Selin Hazir
  8. Coalition structures induced by the strength of a graph. By Michel Grabisch; Alexandre Skoda

  1. By: Nicholas Economides (Stern School of Business, New York University, 70 Washington Square South, New York, NY 10012, USA.); David Henriques (Stern School of Business, New York University, 70 Washington Square South, New York, NY 10012, USA.)
    Abstract: In Electronic Payment Networks (EPNs) the No-Surcharge Rule (NSR) requires that merchants charge the same final good price regardless of the means of payment chosen by the customer. In this paper, we analyze a three-party model (consumers, merchants, and proprietary EPNs) to assess the impact of a NSR on the electronic payments system, in particular, on competition among EPNs, network pricing to merchants and consumers, EPNs' profits, and social welfare. We show that imposing a NSR has a number of effects. First, it softens competition among EPNs and rebalances the fee structure in favor of cardholders and to the detriment of merchants. Second, we show that the NSR is a profitable strategy for EPNs if and only if the network e¤ect from merchants to cardholders is sufficiently weak. Third, the NSR is socially (un)desirable if the network externalities from merchants to cardholders are sufficiently weak (strong) and the merchants' market power in the goods market is sufficiently high (low). Our policy advice is that regulators should decide on whether the NSR is appropriate on a market-by-market basis instead of imposing a uniform regulation for all markets. JEL Classification: L13, L42, L80.
    Keywords: Electronic payment system, market power, network externalities, no-surcharge rule, regulation, two-sided markets, MasterCard, Visa, American Express, Discover.
    Date: 2011–10
  2. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Bastian Rake (Friedrich-Schiller-University Jena, Graduate College "The Economics of Innovative Change")
    Abstract: Knowledge production and scientific research have become increasingly more collaborative and international, particularly in pharmaceuticals. We analyze international research networks on the country level in different disease groups. Our empirical analysis is based on a unique dataset of scientific publications related to pharmaceutical research. Using social network analysis, we find that both the number of countries and their connectivity increase in almost all disease groups. The cores of the networks consist of high income OECD countries and remain rather stable over time. We use network regression techniques in order to analyze the dynamics of the networks. Our results indicate that an accumulative advantage based on preferential attachment and point connectivity as a proxy for multi-connectivity are positively related to changes in the countries' collaboration intensity.
    Keywords: International Cooperation, Pharmaceuticals, Research Networks, Network Dynamics, MRQAP
    JEL: R10 O31
    Date: 2011–11–08
  3. By: Bode, Alexander; Alig, Simon
    Keywords: Innovation management, innovation strategy, innovation cooperation, innovation network
    Date: 2011
  4. By: Chatterjee, Kalyan (Department of Economics, The Pennsylvania State University); Dutta, Bhaskar (Department of Economics,University of Warwick)
    Abstract: This paper studies a model of diffusion in a fixed, finite connected network. There is an interested party that knows the quality of the product or idea being propagated and chooses an implant in the network to influence other agents to buy or adopt. Agents are either “innovators”, who adopt immediately, or rational. Rational consumers buy if buying rather than waiting maximizes expected utility. We consider the conditions on the network under which efficient diffusion of the good product with probability one is a perfect Bayes equilibrium. Centrality measures and the structure of the entire network are both important. We also discuss various inefficient equilibria.
    Date: 2011
  5. By: Boehe, Dirk Michael
    Date: 2011–10
  6. By: Michael Barber; Thomas Scherngell
    Abstract: Interactions between firms, universities, and research organizations are crucial for successful innovation in the modern knowledge-based economy. Systems of such interactions constitute R&D networks. R&D networks may be meaningful segmented using recent methods for identifying communities, subnetworks whose members are more tightly linked to one another than to other members of the network. In this paper, we identify such communities in the European R&D network using data on joint research projects funded by the fifth European Framework Programme. We characterize the identified communities according to their thematic orientation and spatial structure. By means of a Poisson spatial interaction model, we estimate the impact of various separation factors – such as geographical distance – on the variation of cross-region collaboration activities in a given community. The European coverage is achieved by using data on 255 NUTS-2 regions of the 25 pre-2007 EU member-states, as well as Norway and Switzerland. The results demonstrate that European R&D networks are not homogeneous, instead showing relevant community substructures with distinct thematic and spatial properties.
    Date: 2011–09
  7. By: Cilem Selin Hazir
    Abstract: Empirical evidence shows that research is being carried out more in cooperation or in collaboration with others, and the networks described by these collaborative research activities are becoming more and more complex. This phenomenon brings about new strands of research questions and opens up a different research context in the area of geography of innovation. The recent set of literature addressing these new issues shows a high degree of variation in terms of focus, approaches and methodology. Hence to elucidate the relationship between networks and geography it is crucial to have a review them. In this regard, this study focuses on a particular type of networks, namely, project based R&D networks and aims at describing the state-of-the-art in explaining the specificity of geography in formation and evolution of such networks. Towards this aim, we framed the discussion along four lenses: the specificity of geography in partner choice, in successful execution of the collaboration, in the resulting innovation performance both at the organizational and regional level, and the spatio-temporal evolution of networks. The overview provided by the survey is suggestive regarding the theorization of geography and network relationship, and informative regarding the issues demanding further research effort, and promising extensions.
    Date: 2011–09
  8. By: Michel Grabisch (Centre d'Economie de la Sorbonne - Paris School of Economics); Alexandre Skoda (Centre d'Economie de la Sorbonne)
    Abstract: We study cooperative games associated with a communication structure which takes into account a level of communication between players. Let us consider an undirected communication graph : each node represents a player and there is an edge between two nodes if the corresponding players can communicate directly. Moreover we suppose that a weight is associated with each edge. We compute the so-called strength of this graph and use the corresponding partition to determine a particular coalition structure. The strength of a graph is a measure introduced in graph theory to evaluate the resistance of networks under attacks. It corresponds to the minimum on all subsets of edges of the ratio between the sum of the weights of the edges and the number of connected components created when the set of edges is suppressed from the graph. The set of edges corresponding to the minimum ratio induces a partition of the graph. We can iterate the calculation of the strength on the subgraphs of the partition to obtain refined partitions which we use to define a hierarchy of coalition structures. For a given game on the graph, we build new games induced by these coalition structures and study the inheritance of convexity properties, and the Shapley value associated with them.
    Keywords: Communication networks, coalition structures, cooperative games.
    JEL: C71
    Date: 2011–07

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