nep-net New Economics Papers
on Network Economics
Issue of 2012‒01‒25
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Industrial networks: are they a new and alternative way to conduct business or just a logical consequence of a globalising economy? By Vanessa Siebler
  2. The Diffusion of Microfinance By Abhijit Banerjee; Arun G. Chandrasekhar; Esther Duflo; Matthew O. Jackson
  3. Coalitional Approaches to Collusive Agreements in Oligopoly Games. By Sergio Currarini; Marco Marini
  4. Ecological analysis of world trade By Leonardo Ermann; Dima L. Shepelyansky
  5. Goods Follow Bytes: The Impact of ICT on EU Trade By Anselm Mattes; Philipp Meinen; Ferdinand Pavel
  6. Ethical Business and New Roles of Leadership: The case of collaborative networks and future research on virtuality By Jan Worst

  1. By: Vanessa Siebler (Goethe Universität Frankfurt am Main, Dep. Sociology)
    Abstract: Networks have been a hot topic in recent years, not only in mainstream media but also in academic literature. The sociological interest in industrial networks is one of multiple levels and surely stems from the question if networks can benefit society. It was the purpose of this paper to research the emergence of the study of networks or industrial networks and validate, using articles concerned with the matter, if they are in fact a new concept in business or not. Considering the review of literature, one can conclude that by no means are networks in business a novelty but a logical consequence of human relationships in general and also that network structures have been present long before their discovery through academia, only not identified as such. It was found that the previous definition of market structures in business, while maneuvering between the two extremes of hierarchy and a free market, may have been too rigid and networks provided an excellent alternative term. It can further be suggested that the study of networks should focus on exchange mechanisms, cultural differences and emotional involvement as industrial networks may differ in their degrees of freedom, scale and purpose but always rely on reciprocity, as do all human relationships.
    Keywords: Networks; industrial networks
    JEL: D21 L16 O12
    Date: 2011–07
  2. By: Abhijit Banerjee; Arun G. Chandrasekhar; Esther Duflo; Matthew O. Jackson
    Abstract: We examine how participation in a microfinance program diffuses through social networks. We collected detailed demographic and social network data in 43 villages in South India before microfinance was introduced in those villages and then tracked eventual participation. We exploit exogenous variation in the importance (in a network sense) of the people who were first informed about the program, "the injection points". Microfinance participation is higher when the injection points have higher eigenvector centrality. We estimate structural models of diffusion that allow us to (i) determine the relative roles of basic information transmission versus other forms of peer influence, and (ii) distinguish information passing by participants and non-participants. We find that participants are significantly more likely to pass information on to friends and acquaintances than informed non-participants, but that information passing by non-participants is still substantial and significant, accounting for roughly a third of informedness and participation. We also find that, conditioned on being informed, an individual's decision is not significantly affected by the participation of her acquaintances.
    JEL: D13 D85 G21 L14 O12 O16 Z13
    Date: 2012–01
  3. By: Sergio Currarini (Department of Economics,Faculty of Economics, Università degli Studi di Venezia "Ca' Foscari"); Marco Marini (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo" and CREI, Università di Roma III)
    Abstract: In this paper we review a number of coalitional solution concepts for the analysis of the stability of cartels and mergers under oligopoly. We show that, although so far the industrial organization and the cooperative game-theoretic literature have proceeded somehow independently on this topic, the two approaches are highly inter-connected. We first consider the basic problem of the stability of the whole industry association of firms under oligopoly and, for this purpose, we introduce the concept of core in games with externalities. We show that different assumptions on the behaviour as well as on the timing of the coalitions of firms yield very di¤erent results on the set of allocations which are core-stable. We then consider the stability of associations of firms organized in coalition structures different from the grand coalition. To this end, various coalition formation games recently introduced by the so called endogenous coalition formation literature are critically reviewed. Again, di¤erent assumptions concerning the timing and the behaviout of firms are shown to yield a wide range of different results.
    Keywords: Cooperative Games, Coalitions, Mergers, Cartels, Core, Games with Externalities, Endogenous Coalition Formation.
    JEL: C70 C71 D23 D43
    Date: 2011
  4. By: Leonardo Ermann; Dima L. Shepelyansky
    Abstract: Ecological systems have a high level of complexity combined with stability and rich biodiversity. Recently, the analysis of their properties and evolution has been pushed forward on a basis of concept of mutualistic networks that provides a detailed understanding of their features being linked to a high nestedness of these networks. It was shown that the nestedness architecture of mutualistic networks of plants and their pollinators minimizes competition and increases biodiversity. Here, using the United Nations COMTRADE database for years 1962 - 2009, we show that a similar ecological analysis gives a valuable description of the world trade. In fact the countries and trade products are analogous to plants and pollinators, and the whole trade network is characterized by a low nestedness temperature which is typical for the ecological networks. This approach provides new mutualistic features of the world trade highlighting new significance of countries and trade products for the world trade.
    Date: 2012–01
  5. By: Anselm Mattes; Philipp Meinen; Ferdinand Pavel
    Abstract: This paper empirically assesses whether the deployment and use of Information and Communication Technology (ICT) infrastructure at the national level affects trade flows within the European Union (EU) and between the EU and its main trading partners. The analysis tests the hypothesis that availability and use of ICT enhances trade by reducing transaction costs and through network effects that materialize when both trading partners are advanced users of ICT. The empirical analysis is based on the application of gravity equations in various robust specifications. The results suggest that ICT does have a significant impact on EU trade. In particular, we find trade to be enhanced if both trading partners reveal advanced ICT endowments, which supports the expected network effects. Additionally, we observe trade diversion effects from less to highly ICT developed countries.
    Keywords: Exports, ICT, gravity model, international trade, network effects
    JEL: F1 D2
    Date: 2012
  6. By: Jan Worst (Maastricht School of Management,
    Abstract: The importance of networks supporting collaboration between legally independent business partners is increasing. This is partly due to on specialization focused business strategies and the effects of globalization. Often these collaborative networks are submitted to web-based services linked through service oriented architecture (SOA) to individual firms’ ERP environment. However, when looking at Western Europe, integration of business activities is still challenged by a blockade of traditional business patterns. Participants in collaborative networks have to cross bridges to break with traditional business patterns. Virtues in business such as: transparency, trustworthiness, and action orientation are considered as constraints. Traditional business cherishes illusion about price, capacity and firms’ business standards. To implement change and transparent business settings ethical leadership is required.
    Keywords: network, collaboration, collusion, ethics, regulation, economic development
    JEL: M14 M15 M19
    Date: 2011–11

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