nep-net New Economics Papers
on Network Economics
Issue of 2013‒06‒09
five papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Embeddedness of regions in European knowledge networks. A comparative analysis of inter-regional R and D collaborations, co-patents and co-publications By Iris Wanzenböck; Thomas Scherngell; Thomas Brenner
  2. Co-Evolution of Cross-border Portfolio Investment Networks and Indicators for Financial Crises By Andreas Joseph; Guanrong Chen
  3. A degree-distance-based connections model with negative and positive externalities By Philipp Möhlmeier; Agnieszka Rusinowska; Emily Tanimura
  4. Demand externalitites and price cap regulation: Learning from a two-sided market By Zhu Wang
  5. Protecting and Empowering Consumers in the Purchase of Digital Content Products By OECD

  1. By: Iris Wanzenböck (Austrian Institute of Technology (AIT) Vienna); Thomas Scherngell (Austrian Institute of Technology (AIT) Vienna); Thomas Brenner (Philipps-Universität Marburg)
    Abstract: This paper investigates the embeddedness of European regions in different types of inter-regional knowledge networks, namely project based R and D collaborations within the EU Framework Programmes (FPs), co-patent networks and co-publication networks. Embeddedness refers to the network positioning of regions captured in terms of social network analytic (SNA) centrality measures. The objective is to estimate how region-internal and region-external factors influence network embeddedness in the distinct network types, in order to identify differences in their driving factors at the regional level. In our modelling approach, we apply advanced spatial econometric techniques by means of a mixed effects panel version of the Spatial Durbin Model (SDM), and introduce a set of variables accounting for a capacity-specific, a relational as well as a spatial dimension in regional knowledge production activities. The results reveal conspicuous differences between the knowledge networks. Internal capacity- and technology-related aspects but also spatial spillover impacts from surrounding regions prove to be particularly important for centrality in the co-patent network. We also find significant - region-internal and region-external - impacts of general economic conditions on a region’s centrality in the FP network. However, we cannot observe substantial spill-over effects of region-external factors on centrality in the co-publication network. Thus, the distinctive knowledge creation foci in each network seem to find expression in the network structure as well as its regional determinants.
    Keywords: knowledge networks, network embeddedness, network centrality, regional knowledge production, panel Spatial Durbin model.
    JEL: L14 N74 O33 R15
    Date: 2013–05–29
  2. By: Andreas Joseph; Guanrong Chen
    Abstract: Two financial networks, namely, cross-border long-term debt and equity securities portfolio investment networks are analysed. They serve as proxies for measuring the interdependence of financial markets and the robustness of the global financial system from 2002 to 2012, covering the 2008 global financial crisis. Focusing on the largest strongly-connected core component of the threshold network, while the edge threshold is set according to the percolation properties of the long-term debt securities network, we identify two early-warning indicators for global financial distress. The spread of certain financial derivative products, such as credit default swaps and equity-linked derivatives, scales with the edge density of the long-term debt securities network. In addition, the algebraic connectivity of the equity securities network, taken as a measure for the robustness of financial markets, drops already sharply well ahead of the 2008 financial crisis.
    Date: 2013–06
  3. By: Philipp Möhlmeier (BiGSEM - Bielefeld University - Center for Mathematical Economics); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Emily Tanimura (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: We develop a modification of the connections model by Jackson and Wolinsky (1996) that takes into account negative externalities arising from the connectivity of direct and indirect neighbors, thus combining aspects of the connections model and the co-author model. We consider a general functional form for agents' utility that incorporates both the effects of distance and of neighbors' degree. Consequently, we introduce a framework that can be seen as a degree-distance-based connections model with both negative and positive externalities. Our analysis shows how the introduction of negative externalities modifies certain results about stability and efficiency compared to the original connections model. In particular, we see the emergence of new stable structures, such as a star with links between peripheral nodes. We also identify structures, for example, certain disconnected networks, that are efficient in our model but which could not be efficient in the original connections model. While our results are proved for the general utility function, some of them are illustrated by using a specific functional form of the degree-distance-based utility.
    Keywords: Connections model; degree; distance; negative externalities; positive externalities; pairwise stability; efficiency
    Date: 2013–04
  4. By: Zhu Wang
    Abstract: This paper studies unintended consequences of price cap regulation in the presence of demand externalities in the context of payment cards. The recent U.S. debit card regulation was intended to lower merchant card acceptance costs by capping the maximum interchange fee. However, small-ticket merchants found their fees instead higher after the regulation. To address this puzzle, I construct a two-sided market model and show that card demand externalities across merchant sectors rationalize card networks’ pricing response. Based on the model, I study socially optimal card fees and an alternative cap regulation that may avoid the unintended consequence on small-ticket merchants.
    Keywords: Financial markets ; Payment systems ; Law and legislation
    Date: 2013
  5. By: OECD
    Abstract: The spread of broadband, mobile devices and online and mobile payments usage are driving the expansion in digital content products. These can be downloaded, streamed or accessed through Internet Protocol (IP) TV on a range of channels including online retail platforms and social media. While consumer demand for these products has increased rapidly in recent years, a number of challenges undermine confidence in the market. Issues requiring policy attention include: inadequate disclosures about product usage or interoperability limitations; product access and quality problems; unclear rules on the collection, usage and sharing of data provided by consumers as a condition for purchasing products; and inadequate dispute resolution and redress mechanisms.
    Date: 2013–03–19

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