nep-net New Economics Papers
on Network Economics
Issue of 2012‒09‒22
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Congestion Pricing and Net Neutrality By Jullien, Bruno; Sand-Zantman, Wilfried
  2. Market Access and Information Technology Adoption: Historical Evidence from the Telephone in Bavaria By Florian Ploeckl
  3. Preferential Attachment in the Interaction between Dynamically Generated Interdependent Networks By Boris Podobnik; Davor Horvatic; Mark Dickison; H. Eugene Stanley
  4. Competing for Customers in a Social Network (R) By Pradeep K. Dubey; Rahul Garg; Bernard De Meyer
  5. Wealth distribution on complex networks By Takashi Ichinomiya
  6. Partnerships, Imperfect Monitoring and Outside Options: Theory and Experimental Evidence By Paolo Crosetto; Alexia Gaudeul; Gerhard Riener

  1. By: Jullien, Bruno (Toulouse School of Economics (GREMAQ-CNRS and IDEI)); Sand-Zantman, Wilfried (Toulouse School of Economics (GREMAQ and IDEI))
    Abstract: We consider a network that intermediates traffic between content producers and consumers. The content is heterogenous in the cost of traffic. While, consumers do not know the traffic cost when deciding on consumption, a content producer knows his cost but may not con- trol the consumption. The network observes only the resulting total cost of traffic and can charge a congestion price to one or both of the parties, along with an ex-ante hook-up fee to consumers. We fi…rst show that, if the content is a paid content, the network charges only the content producers and capping congestion prices for content in this case is sub-optimal. In the case of free content, the network extracts some rent from content with congestion prices and may exclude some content. We show that there is efficient or excessive exclusion of traffic. We then endogenize the choice of business model by allowing the content producers to choose between a paid model and a free model. In this case, the network charges higher congestion prices to content but the cost is smaller as some content can stay under a paid model that would be excluded otherwise. At last, we characterize an optimal mechanism which consists in letting the content producers choose between di¤erent public cate- gories associated with different congestion prices for content and for consumers.
    Date: 2012–06
  2. By: Florian Ploeckl
    Abstract: Information technology, like the telephone, influences market access; this paper answers the question about a reverse effect, does market access affect information technology, in particular its adoption? Using the introduction of the telephone in Bavaria, I demonstrate with a rank, order and stock effects diffusion model how market access affects the diffusion of local telephone exchanges over towns as well as the rate of adoption of telelphone lines within towns. The results of a duration analysis show that market access speeds up the diffusion, a spatial correlation specification demonstrates that this is not just a geographic effect. The rate of adoption within towns is also affected by the adoption of lines in other towns, the results indicate that about 4% of all lines are due to the ability to call outside your local exchange network. Market access is therefore shown to impact the adoption of technology.
    Keywords: Information technology adoption, Market access, Spatial diffusion, Bavaria, Telephone
    JEL: L92 N73 N93 O33
    Date: 2012
  3. By: Boris Podobnik; Davor Horvatic; Mark Dickison; H. Eugene Stanley
    Abstract: We generalize the scale-free network model of Barab\`asi and Albert [Science 286, 509 (1999)] by proposing a class of stochastic models for scale-free interdependent networks in which interdependent nodes are not randomly connected but rather are connected via preferential attachment (PA). Each network grows through the continuous addition of new nodes, and new nodes in each network attach preferentially and simultaneously to (a) well-connected nodes within the same network and (b) well-connected nodes in other networks. We present analytic solutions for the power-law exponents as functions of the number of links both between networks and within networks. We show that a cross-clustering coefficient vs. size of network $N$ follows a power law. We illustrate the models using selected examples from the Internet and finance.
    Date: 2012–09
  4. By: Pradeep K. Dubey; Rahul Garg; Bernard De Meyer
    Date: 2012
  5. By: Takashi Ichinomiya
    Abstract: We study the wealth distribution of the Bouchaud--M\'ezard (BM) model on complex networks. It has been known that this distribution depends on the topology of network by numerical simulations, however, no one have succeeded to explain it. Using "adiabatic" and "independent" assumptions along with the central-limit theorem, we derive equations that determine the probability distribution function. The results are compared to those of simulations for various networks. We find good agreement between our theory and the simulations, except the case of Watts--Strogatz networks with a low rewiring rate, due to the breakdown of independent assumption.
    Date: 2012–09
  6. By: Paolo Crosetto (Max Planck Institute of Economics, Jena); Alexia Gaudeul (Max Planck Institute of Economics, Jena); Gerhard Riener (Düsseldorf Institute for Competition Economics (DICE), Heinrich Heine University, Düsseldorf)
    Abstract: We study theoretically and experimentally a two-person partnership game whereby agents only see the uncertain outcome of their joint effort but not how much the other agent contributed to it. The model combines problems of free-riding present in public good production and in teams with imperfect monitoring. We analyse effort and exit behaviour conditional on subjects' beliefs over the action taken by their partners and consider the effect of the availability and profitability of outside options. Our subjects do not adapt effort as a response to changes in their beliefs about the effort of their partner. Subjects display aversion for team work by exiting the partnership even when they believe their partner exerts sufficient effort to sustain it. Higher outside options do not either motivate or discourage effort in joint work but rather result in not only inefficient but also irrational breakdown in partnerships. Overall, social welfare decreases as the incentive to exit increases.
    Keywords: Imperfect monitoring, outside options, partnerships, public good production, repeated games, teams
    JEL: D82 H41
    Date: 2012–09–11

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