nep-net New Economics Papers
on Network Economics
Issue of 2013‒09‒13
seven papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Bertrand Competition under Network Externalities By Masaki Aoyagi
  2. Optimal Environmental Policy with Network Effects: Is Lock-in in Dirty Technologies Possible? By Mads, Greaker; Kristoffer, Midttømme
  3. The rise and fall of RD networks By Mario V.Tomasello; Mauro Napoletano; Antonio Garas; Franck Schweitzer
  4. Self-organization of knowledge economies By Lafond, Francois
  5. Communicating with Farmers through Social Networks By Ariel BenYishay; A. Mushfiq Mobarak
  6. Voluntary Pooled Public Knowledge Goods and Coalition Formation By Tom DEDEURWAERDERE; Paolo MELINDI GHIDI
  7. If MOOCS are the answer – did we ask the right questions? Implications for the design of large-scale open online courses By Marco Kalz; Marcus Specht

  1. By: Masaki Aoyagi
    Abstract: Two sellers engage in price competition to attract buyers located on a network. The value of the good of either seller to any buyer depends on the number of neighbors on the network who consume the same good. For a generic specification of consumption externalities, we show that an equilibrium price equals the marginal cost if and only if the buyer network is complete or cyclic. When the externalities are approximately linear in the size of consumption, we identify the classes of networks in which one of the sellers monopolizes the market, or the two sellers segment the market.
    Date: 2013–09
  2. By: Mads, Greaker (Statistics Norway); Kristoffer, Midttømme (Dept. of Economics, University of Oslo)
    Abstract: Network externalities could be present for many low or zero emission technologies. One obvious example is alternative fuel cars, whose use value depends on the network of service stations. The literature has only briefy looked at environmentally benefcial technologies. Yet, the general literature on network effects is mixed on whether governments need to intervene in order to correct for network externalities. In this paper we study implications of network effects on environmental policy in a discrete time dynamic game. Firms sell a durable good. One type of durable is causing pollution when being used, while the other type is "clean". Consumers' utility increase in the number of other users of the same type of durable, which gives rise to the network effect. We find that the optimal tax depends on the size of the clean network. If starting from a situation in which the dirty network dominates, the optimal tax may exceed the marginal environmental damage, thereby charging consumers for more than just their own emissions. Applying a Pigovian tax may, on the contrary, fail to introduce a socially beneficial clean network.
    Keywords: Network eects; lock-in; enviromnetal taxes
    JEL: H23 Q55 Q58
    Date: 2013–06–15
  3. By: Mario V.Tomasello (ETH Zurich,Switzerland); Mauro Napoletano (Ofce sciences-po, Skema,Business School Campus Sophia Antipolis France); Antonio Garas (:ETH Zurich,Switzerland); Franck Schweitzer (ETH Zurich,Switzerland)
    Abstract: Drawing on a large database of publicly announced RD alliances.we track the evolution of RD networks in a large number of economic sectors over a long time period 1986 2009.Our main goal is to evaluate temporal and sectoral robustness of the main statistical properties of empirical RD networks. By studying a large set of indicators, we provide a more complete description of these networks with respect to the existing literature. We find that most network properties are invariant across sectors. In addition, they do not change when alliances are considered independently of the sectors to which partners belong. Moreover, we find that many properties of RD networks are characterized by a rise-andfall dynamics with a peak in the mid-nineties. Finally, we show that such properties of empirical RD networks support predictions of the recent theoretical literature on RD network formation.
    Date: 2013–09
  4. By: Lafond, Francois (UNU-MERIT / MGSoG)
    Abstract: Suppose that homogenous agents fully consume their time to invent new ideas and learn ideas from their friends. If the social network is complete and agents pick friends and ideas of friends uniformly at random, the distribution of ideas’ popularity is an extension of the Yule-Simon distribution. It has a power-law tail, with an upward or downward curvature. For infinite population it converges to the Yule-Simon distribution. The power law is steeper when innovation is high. Diffusion follows S-shaped curves.
    Keywords: innovation, diffusion, two-mode networks, cumulative advantage, quadratic attachment kernel, power law, Yule-Simon distribution, generalized hypergeometric distribution
    JEL: D83 D85 O31 O33
    Date: 2013
  5. By: Ariel BenYishay (University of New South Wales); A. Mushfiq Mobarak (Economic Growth Center, Yale University)
    Abstract: Low adoption of productive agricultural technologies is a puzzle. Agricultural extension services rely on external agents to communicate with farmers, although social networks are known to be the most credible source of information about new technologies. We conduct a large-scale field experiment on communication strategies in which extension workers are partnered with different members of social networks. We show that communicator actions and effort are susceptible to small performance incentives, and adoption rates vary by communicator type. Communicators who face conditions most comparable to target farmers are the most persuasive. Incorporating communication dynamics can enrich the literature on social learning.
    Keywords: social learning, agriculture, technology adoption, Malawi
    JEL: O33 O13 Q16
    Date: 2013–08
    Abstract: In this paper we develop a theoretical model of the mechanisms behind the voluntary provision of public knowledge goods in coalitions in presence of social preferences. The model builds on the large empirical literature on voluntary production of pooled public knowledge goods, such as source code in communities of software developers or data voluntarily provided to open access data repositories. This literature shows that the provision of public goods is strongly dependent on the presence of social preferences such as group identity and social approval of individual pro-social attitudes. To integrate these effects in standard public good theory this paper builds a private-collective model of public good provision, where contribution to public knowledge goods generates both public and exclusive private benefits for the members of the coalition only. The analysis shows that, when the private benefit is important, the effect of the social preferences on the coalition formation is ambiguous. In particular, in the latter case, in presence of strong individual reputational effects, the public knowledge goods will be more difficult to produce. The comparison of the predictions of the theoretical model with the stylized facts of large scale surveys of Free/Libre/Open-Source (FLOSS) software developers confirms the results of the model.
    Keywords: coalition formation, private-collective model, social group identity, pro-social reputation, public knowledge goods, social dilemma
    JEL: H42 D71
    Date: 2013–09–03
  7. By: Marco Kalz (Centre for Learning Sciences and Technologies (CELSTEC), Open University of the Netherlands, P.O. Box 2960, 6401 DL Heerlen, The Netherlands, E-mail:, Tel: +31-455762718); Marcus Specht
    Abstract: In this conference contribution we deal with the phenomenon of Massive Open Online Courses (MOOCs). Based on summary of the state of the art we discuss aspects of the learning design of MOOCs that have not been sufficiently studied. More specifically we discuss the issue of diversity and support facilities in MOOCs. We introduce the concept of learning networks and learner support services that have been developed to enable personalized learning scenarios in large-scale online environments. We report about a learning design for large-scale open online courses that has been evaluated and further developed in the last year. Last but not least we discuss future research.
    Keywords: MOOC, technology-enhanced learning, learning networks, diversity, learner-support, learning design
    Date: 2013–09

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