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on Network Economics |
| By: | M. Bourreau; P. Dogan |
| URL: | https://d.repec.org/n?u=RePEc:qsh:wpaper:33650 |
| By: | Jin-Hyuk Kim (University of Colorado at Boulder); Jeffrey T. Prince (Department of Business Economics and Public Policy, Indiana University Kelley School of Business); Calvin Qiu (Independent) |
| Abstract: | We present theoretical and empirical analyses of indirect network effects for a hardware market with vertically differentiated complementary goods. We demonstrate that the heretofore typical use of aggregate software counts can mis-measure the presence and/or magnitude of indirect network effects. We show this is true when there is correlation along the quality dimension between the marginal utility of software and either 1) the response of software supply to an increase in installed base, or 2) conditional variation in software availability. We illustrate this idea using a simple monopolistic competition model, and through empirical analysis of the 7th-generation console market. |
| Keywords: | indirect network effects, vertical differentiation, video game industry |
| JEL: | L14 L82 |
| Date: | 2013–05 |
| URL: | https://d.repec.org/n?u=RePEc:iuk:wpaper:2013-10 |
| By: | Alexei Parakhonyak (National Research University Higher School of Economics, Moscow, Russia.); Nick Vikander (University of Copenhagen, Department of Economics.) |
| Abstract: | This paper examines the optimal sequencing of sales in the presence of network externalities. A firm sells a good to a group of consumers whose payoff from buying is increasing in total quantity sold. The firm selects the order to serve consumers so as to maximize expected sales. It can serve all consumers simultaneously, serve them all sequentially, or employ any intermediate scheme. We show that the optimal sales scheme is purely sequential, where each consumer observes all previous sales before choosing whether to buy himself. A sequential scheme maximizes the amount of information available to consumers, allowing success to breed success. Failure can also breed failure, but this is made less likely by consumers’ desire to influence one another’s behavior. We show that when consumers differ in the weight they place on the network externality, the firm would like to serve consumers with lower weights first. Our results suggests that a firm launching a new product should first target independent-minded consumers who can serve as opinion leaders for those who follow. |
| Keywords: | Product launch, Network externality, Sequencing of sales |
| JEL: | M31 D42 D82 L12 |
| Date: | 2013 |
| URL: | https://d.repec.org/n?u=RePEc:hig:wpaper:41/ec/2013 |
| By: | M. Bourreau; P. Dogan; R. Lestage |
| URL: | https://d.repec.org/n?u=RePEc:qsh:wpaper:85926 |
| By: | Ding, Ke |
| Abstract: | This paper discusses globalization’s impact on production and distribution systems in emerging economies. On one hand, globalization has resulted in an increasing number of multinational corporations to adopt a platform strategy for their customers in emerging markets. On the other hand, developing countries have witnessed the integration of an increasing number of traditional marketplaces into a powerful distribution system, characterized as a specialized market system. Consequently, an unique industrial organization has developed in emerging economies, regarded as emerging global value chains (EGVCs). They comprise a large number of small firms together with a small number of large platform providers and display the "market" type general governance patterns. Firms in EGVCs are more likely to realize functional upgrading and grow into strong lead firms. |
| Keywords: | Developing countries, International economic relations, Globalization, Platform, Network effect, Emerging economies, Value chain governance |
| JEL: | L63 O14 O17 |
| Date: | 2013–11 |
| URL: | https://d.repec.org/n?u=RePEc:jet:dpaper:dpaper432 |
| By: | Taylor J. Canann (Department of Economics, Brigham Young University) |
| Abstract: | I analyze the effects of network structure on vulnerability disclosure policy. My analysis finds that the structure of the network of households can greatly effect the overall welfare of the economy. Specifically, I find that the distribution of the centrality of the nodes and the radius of the network have a significant effect on the optimal policy system. |
| Keywords: | Network Theory, Cyber Security, Disclosure Policy, Infromation Security, Network Centrality |
| JEL: | C7 O3 |
| Date: | 2013–12 |
| URL: | https://d.repec.org/n?u=RePEc:byu:byumcl:201305 |
| By: | P. Dogan |
| URL: | https://d.repec.org/n?u=RePEc:qsh:wpaper:33644 |
| By: | Miguel Vazquez; Michelle Hallack; Jean-Michel Glachant |
| Abstract: | The institutional setting of open gas networks and markets is revealing considerably diverse and diverging roads taken by the US, the EU or Australia. We will show that this is explained by key choices made in the liberalization process. This liberalization is based on a redefinition of the property rights associated with transmission grid usage. That leads to different systems for the transmission services, as well as for the gas commodity trade, which in turn depends on the network services to get any market deal actually implemented. Not only do those choices depend on the physical architecture of the network, but also the perceived difficulties and costs to coordinate the actual transmission services through certain market arrangements. |
| Keywords: | network regulation, gas market, property rights, carriage systems |
| Date: | 2013–10 |
| URL: | https://d.repec.org/n?u=RePEc:rsc:rsceui:2013/73 |
| By: | Sabatini, Fabio; Sarracino, Francesco |
| Abstract: | Studies in the social capital literature have documented two stylised facts: first, a decline in measures of social participation has occurred in many OECD countries. Second, and more recently, the success of social networking sites (SNSs) has resulted in a steep rise in online social participation. Our study adds to this body of research by conducting the first empirical assessment of how online networking affects two economically relevant aspects of social capital, i.e. trust and sociability. We find that participation in SNSs such as Facebook and Twitter has a positive effect on face to face interactions. However, social trust decreases with online interactions. Several interpretations of these findings are discussed. -- |
| Keywords: | social participation,online networks,Facebook,Twitter,social capital,broadband,digital divide,Internet-mediated communication |
| JEL: | C36 D85 O33 Z13 |
| Date: | 2013–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:88145 |
| By: | Tom Broekel; Pierre-Alexandre Balland; Martijn Burger; Frank van Oort |
| Abstract: | The importance of network structures for the transmission of knowledge and the diffusion of technological change has been emphasized in economic geography. Since network structures drive the innovative and economic performance of actors in regional contexts, it is crucial to explain how networks form and evolve over time and how they facilitate inter-organizational learning and knowledge transfer. The analysis of relational dependent variables, however, requires specific statistical procedures. In this paper, we discuss four different models that have been used in economic geography to explain the spatial context of network structures and their dynamics. First, we review gravity models and their recent extensions and modifications to deal with the specific characteristics of networked relations. Second, we discuss the quadratic assignment procedure that has been developed in mathematical sociology for diminishing the bias induced by network dependencies. Third, we present exponential random graph models that not only allow dependence between observations, but also model such network dependencies explicitly. Finally, we deal with dynamic networks, by introducing stochastic actor oriented models. Strengths and weaknesses of the different approaches are discussed together with domains of applicability for the analysis of (knowledge) network structures and their dynamics. |
| Keywords: | Economic geography, knowledge networks, network models, quadratic assignment procedure, gravity model, exponential random graph model, stochastic actor-oriented model |
| JEL: | R11 O32 D85 |
| Date: | 2013–12 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:1325 |
| By: | Nikolas Tsakas |
| Abstract: | We study the optimal targeting strategy of a planner who seeks to maximize the diffusion of an action in a network where agents imitate successful past behavior of their neighbors. We find that the optimal targeting strategy depends on two parameters: (i) the likelihood of the action being more successful than its alternative and (ii) the planner's patience. More specifically, when the planner's preferred action has higher probability of being more successful than its alternative, then the optimal strategy for an infinitely patient planner is to concentrate all the targeted agents in one connected group; whereas when this probability is lower it is optimal to spread them uniformly around the network. Interestingly, for a very impatient planner, the optimal targeting strategy is exactly the opposite. Our results highlight the importance of knowing a society's exact network structure for the efficient design of targeting strategies, especially in settings where the agents are positionally similar. |
| JEL: | D83 D85 H23 M37 |
| Date: | 2013–12–08 |
| URL: | https://d.repec.org/n?u=RePEc:jmp:jm2013:pts99 |
| By: | Mitsuyo ANDO (Keio University) |
| Abstract: | This paper attempts to investigate the features of development and restructuring patterns of production/distribution networks in East Asia, mainly in machinery sectors, using international trade data at the most disaggregated level, to discuss their resilient nature, and to provide policy implications for the regional production networks and the economic development in the region. Although the negative impacts of the Global Financial Crisis (GFC) in 2008 were initially transmitted through the networks, the production/distribution networks in East Asia rather revealed their resilient nature. Our empirical analysis demonstrates that intra-regional machinery trade has been enhanced and contributed as a source of quick recovery from the GFC, and that the restructuring of regional production/distribution networks has been accelerated with the GFC as a trigger. Our study on trade patterns in terms of extensive margins also demonstrates clearly how the extent and depth of regional production networks have been changing, particularly after the GFC. Based on our empirical investigation, we discuss challenges and policy implication for the further development of the production networks and economic development and integration in the region. |
| Keywords: | The extent and depth of regional production networks, East Asia, Extensive margins, Regional integration |
| JEL: | F14 F23 |
| Date: | 2013–11 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2013-33 |
| By: | Chaudhuri, Sarbajit |
| Abstract: | A three-sector, three-factor general equilibrium model is developed for a small open developing economy where an inflow of foreign capital generates externalities in the presence of a non-traded final commodity. There are two types of capital and the efficiency of labour depends positively on the consumption of the non-traded commodity. Effects of inflows of foreign capital on social welfare and human capital formation are examined. The analysis finds that while capital that is used in all the sectors may improve welfare; capital used specifically in the non-traded sector is likely to affect social welfare adversely. These results can at least question the desirability of allowing entry of foreign capital in the non-traded final good sector that emanates externalities. |
| Keywords: | Foreign capital, externality, non-traded good, social welfare, human capital formation, general equilibrium. |
| JEL: | F21 H2 H23 H5 H53 J4 O1 O17 |
| Date: | 2013–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:52140 |