nep-net New Economics Papers
on Network Economics
Issue of 2012‒06‒25
thirteen papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Research collaboration in co-­inventor networks: combining closure,bridging and proximities By Cassi, Lorenzo; Plunket, Anne
  2. On the Private Provision of Public Goods on Networks By Nizar Allouch
  3. The Impact of Transmission Pricing in Network Industries By Ruderer, D.
  4. The Stackelberg Model as a Partial Solution to the Problem of Pricing in a Network By Jolian McHardy; Michael Reynolds; Stephen Trotter
  5. Criminal Networks: Who is the Key Player? By Xiaodong Liu; Eleonora Patacchini; Yves Zenou; Lung-Fei Lee
  6. Cross-border policy networks in the trinational region of Basel By WALTHER Olivier; REITEL Bernard
  7. A Network model of systemic risk: identifying the sources of dependence across institutions By Carlos Castro; Juan Sebastian Ordoñez
  8. Social Networks and New Product Choice By Richards, Timothy J.; Allender, William J.; Hamilton, Stephen F.
  9. Friends and Rivals: Modelling the Social Relations of Inventors By Lorenzo Cassi; Lorenzo Zirulia
  10. Tell Me Who You Patent With and I'll Tell You Who You Are: Evidence from Inter-Regional Patenting Networks in Three Emerging Technological Fields By Giulia Ajmone Marsan; Annalisa Primi
  11. Optimal Transportation Network Hub Locations in Food Systems By Etemadnia, Hamideh; Goetz, Stephan J.
  12. Innovation and market dynamics: A two-mode network approach to user-producer relation By Uwe Cantner; Marco Guerzoni; Arianna Martinelli

  1. By: Cassi, Lorenzo; Plunket, Anne
    Abstract: This paper investigates the determinants of co-inventor tie formation using micro-data on genomic patents from 1990 to 2006 in France. In a single analysis, we consider the relational and proximity perspectives that are usually treated separately. In order to do so, we analyse various forms of proximity as alternative driving forces behind network ties that occur within existing components (i.e. closure ties) as well as those between two distinct components (i.e. bridging ties). In doing so, we contrast network and proximity determinants of network formation and we investigate to what extent social networks allow economic actors to cross over geographical, technological and organizational boundaries.
    Keywords: Social networks; relational perspective; proximity; co-patenting; network formation
    JEL: L65 Z13 O33 O31 D85 R11
    Date: 2012–05
  2. By: Nizar Allouch (Queen Mary, University of London, School of Economics and Finance)
    Abstract: This paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors’ provisions. We present a proof for existence and uniqueness of a Nash equilibrium with general best-reply functions. Our uniqueness result simultaneously extends similar results in Bergstrom, Blume, and Varian (1986) on the private provision of public goods to networks and Bramoullé, Kranton, and D'Amours (2011) on games of strategic substitutes to nonlinear best-reply functions. In addition, we investigate the neutrality result of Warr (1983) and Bergstrom, Blume, and Varian (1986) whereby consumers are able to offset income redistributions and tax-financed government contributions. To this effect, we establish that the neutrality result has a limited scope of application beyond regular networks.
    Keywords: Public Goods, Uniqueness Of Nash Equilibrium, Network Games, Neutrality, Bonacich Centrality, Main Eigenvalue
    JEL: C72 D31 H41
    Date: 2012–05
  3. By: Ruderer, D.
    Abstract: The allocation of scarce transmission resources has a considerable impact on investment incentives in network industries. We study the long term effects of two common network management regimes on investment in production and transmission facilities. In one case transmission constraints are directly taken into account through locationally differentiated market prices (simultaneous market clearing). In the other case, a uniform market price is implemented and transmission constraints are resolved in a subsequent congestion market (sequential market clearing). While simultaneous market clearing produces the efficient outcome, sequential market clearing leads to overinvestment in generation and transmission capacity, as we show. These findings contribute to the debate on electricity transmission pricing.
    Keywords: Transmission Investment, Generation Investment, Market Design, Locational Marginal Pricing, Redispatch, Fluctuating Demand, Scarcity Rents
    JEL: L94 L51 D41
    Date: 2012–06–07
  4. By: Jolian McHardy (Department of Economics, University of Sheffield); Michael Reynolds (School of International Studies, University of Bradford); Stephen Trotter (Centre for Economic Policy, University of Hull)
    Abstract: We consider an application of the Stackelberg leader-follower model in prices in a simple two-firm network as a possible way to help resolve externalities that can be harmful to firm profit and welfare. Whilst independent pricing on the network yields lower profit and sometimes even lower welfare than monopoly pricing, we show that by allowing the firms to collude on some prices in a first-stage and set remaining prices independently (competitively) in a second stage, both profit and welfare gains can be made.
    Keywords: Stackelberg; pricing; network
    JEL: L11 L14 L51
    Date: 2012–06
  5. By: Xiaodong Liu (University of Colorado at Boulder); Eleonora Patacchini (La Sapienza University of Rome, EIEF and CEPR); Yves Zenou (Stockholm University, Research Institute of Industrial Economics (IFN) and GAINS); Lung-Fei Lee (The Ohio State University)
    Abstract: We analyze delinquent networks of adolescents in the United States. We develop a dynamic network formation model showing who the key player is, i.e. the criminal who once removed generates the highest possible reduction in aggregate crime level. We then structurally estimate our model using data on criminal behaviors of adolescents in the United States (AddHealth data). Compared to other criminals, key players are more likely to be male, have less educated parents, are less attached to religion and feel socially more excluded. We also find that, even though some criminals are not very active in criminal activities, they can be key players because they have a crucial position in the network in terms of betweenness centrality.
    Keywords: Crime, Bonacich Centrality, Dynamic Network Formation, Crime Policies
    JEL: A14 D85 K42 Z13
    Date: 2012–05
  6. By: WALTHER Olivier; REITEL Bernard
    Abstract: This paper provides evidence of how national and linguistic borders affect the structure of policy networks. Our analysis of the Basel metropolitan region located across Switzerland, France and Germany considers the case of cross-border public transportation. Using a social network approach based on 44 actors, we show that national borders play a diminishing role in the formation of policy networks for both information exchange and decision making but still limit interactions between German and French-speaking actors. Local actors develop different brokerage roles according to their country of origin, with Swiss actors acting as coordinator and representative brokers vis-à-vis players located in France and Germany.
    Keywords: policy networks; cross-border metropolitan region; transport policies; social network analysis; Basel; Switzerland; France; Germany
    JEL: F15 F16 J61 R42 R50 R58
    Date: 2012–06
  7. By: Carlos Castro; Juan Sebastian Ordoñez
    Abstract: Abstract: We design a financial network model that explicitly incorporates linkages across institutions through a direct contagion channel, as well as an indirect common exposure channel. In particular, common exposure is setup so as to link the financial to the real sector. The model is calibrated to balance sheet data on the colombian financial sector. Results indicate that commercial banks are the most systemically important financial institutions in the system. Whereas government owned institutions are the most vulnerable institutions in the system.
    Date: 2012–06–12
  8. By: Richards, Timothy J.; Allender, William J.; Hamilton, Stephen F.
    Abstract: Inuential individuals in a social network environment are important in shaping preferences for new products. In this study, we adopt an incentive compatible choice-based conjoint analysis approach to generate data on the introduction of a new ice cream product. We use spatial econometric methods to determine how individuals are likely to change their preferences when exposed to the choices of other members in their social network. We …nd evidence that agents look to others for guidance in their preference for subjective or taste-speci…c parameters, but rely on own preferences for objectively measured attributes such as price. We also use spatial methods to determine which network-member is the most inuential. We …nd that the most connected member is not necessarily the most inuential, and that inuence can be determined econometrically.
    Keywords: choice-based conjoint, experimental economics, new product introduction, social network analysis, spatial econometrics, Marketing, Production Economics, Public Economics, Research Methods/ Statistical Methods,
    Date: 2012–06–03
  9. By: Lorenzo Cassi (CES, Université Paris 1 – Panthéon-Sorbonne, OST, France; KITeS, Bocconi University, Italy); Lorenzo Zirulia (University of Bologna, Italy; KITeS, Bocconi University, Italy; RCEA, Italy)
    Abstract: In this chapter we develop a model where a population of inventors is rival in the production of patents. Inventors are embedded in the social space, and this affects the process of knowledge creation and diffusion. Our main contribution to the existing theoretical literature on social networks and knowledge is to introduce explicitly patents and patents’ citations. This is interesting per se, and it favours a better comparability of results with those of empirical analysis on the same topic. Results from numerical simulations show that our model is able to replicate the empirical negative relationship between patents’ citations and social distance. Furthermore, different social network structures may have an impact on the exact shape of such relationship.
    Date: 2012–06
  10. By: Giulia Ajmone Marsan; Annalisa Primi
    Abstract: This paper presents an overview of co-patenting trends at the national and regional level in three technology fields (biotechnology, telecommunications and renewable energy), across regions in the OECD and emerging economies, from the late 1970s to the late 2000s. After a general introduction on regional patenting activities, inter-regional co-inventorship networks in the three selected technologies are built and analysed. Different behaviors and relative network positioning emerge, in terms of top patenting regions both across technological fields and over time. Co-patenting networks increase their density over time and they show preferential attachment properties, namely regions with a central position in an early phase of development of the network tend to maintain their positioning in the future. However, there are also windows of opportunity for new central nodes to emerge in the network. Evidence shows that the structure of the network evolves differently depending on technological field and that the role of spatial proximity and capability proximity is mixed in influencing co-inventorship patterns. Co-patenting networks include star players that establish connections regardless of the proximity of partners; but also several wellperforming actors that benefit from proximity or relative proximity of agents.<BR>Cet article analyse des réseaux de co-brevets parmi les régions des pays OCDE et des économies émergentes sélectionnées, dans trois secteurs technologiques (télécommunications, biotechnologie, énergie renouvelable) sur la période 1977-2007. Après une introduction générale sur la production de brevets à niveau régional, les réseaux inter-régionaux de co-brevets dans les trois technologies sont construits et analysés. Des comportements et des positionnements différents à niveau des régions émergent, dans la structure générale des réseaux analysés, selon la technologie et dans le temps. Les réseaux de co-brevets deviennent plus denses avec le temps et montrent la propriété de l’attachement préférentiel, soit les régions avec une position centrale dans le réseau au début tendent à la garder dans le temps. Toutefois, il existe des opportunités pour atteindre un positionnement central même pour les régions qui entrent dans le réseau dans des phases successives. Les données montrent comment la structure du réseau évolue avec des caractéristiques différentes selon la classe technologique et comment la proximité spatiale et la proximité des connaissances influencent l’évolution du phénomène de la co-invention des brevets : les réseaux d’excellence contiennent les acteurs leaders, qui établissent leurs collaborations innovantes sans tenir en compte la proximité géographique, ainsi que plusieurs acteurs performants qui bénéficient aussi de la proximité géographique relative avec autres agents.
    Keywords: ICT, patents, green technologies, biotechnology, regional innovation, network analysis, co-inventorship
    JEL: D85 L00 O1 O25 O3 R12
    Date: 2012–03–20
  11. By: Etemadnia, Hamideh; Goetz, Stephan J.
    Keywords: Agribusiness,
    Date: 2012
  12. By: Uwe Cantner; Marco Guerzoni; Arianna Martinelli
    Abstract: In this paper we propose a new mental representation of how markets, technology and their interaction concur in explaining the why of a certain innovation instead of another. We empirically test this theory in the telecommunication switches industry. We consider innovation as a new alignment of needs and opportunities, where markets and technology are not the sources, but the actors in this alignment process. In order to accomplish this task, we suggest proxies for technological opportunities, market needs, and, at the same time, for interactions of these two elements. We make use of a statistical tool that grasps the matching nature of this interactive phenomenon.
    Keywords: user-producer interaction, two-mode network, telecommunication manufacturing industry
    Date: 2012–06–06
  13. By: Bat Batjargal
    Abstract: This study examines the effect of network’s structural holes, i.e., the absence of a link between two contacts who are both linked to an actor, on product development and profit growth of software ventures in two different institutional contexts of China and Russia. Using interview data of 159 software entrepreneurs in Beijing and Moscow, the study found that the effect of structural holes is contingent upon country institutional context and venture development stage. Specifically, structural holes have a positive main effect on product portfolio but a negative main effect on profit growth in the second revenue year - early stage of venture development. Structural holes are more useful in the Russian institutional context compared to the Chinese institutional context due to the polycentricity of institutions. The research implications of the findings are discussed.
    Keywords: entrepreneurship, networks, institutions, Russia, China
    JEL: L26 L29 L86 P20
    Date: 2012–05–01

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