nep-net New Economics Papers
on Network Economics
Issue of 2014‒03‒08
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Expectation Formation and Social Influence By Andreas Karpf
  2. The Network Origins of Large Economic Downturns By Daron Acemoglu; Asuman E. Ozdaglar; Alireza Tahbaz-Salehi
  3. The structure of online activism By Kevin Lewis; Kurt Gray; Jens Meierhenrich
  4. Networks and the Dynamics of Firms' Export Portfolio: Evidence for Mexico By Juan de Lucio; Raúl Mínguez; Asier Minondo; Francisco Requena
  5. Peer Pressure and Productivity: The Role of Observing and Being Observed By Sotiris Georganas; Mirco Tonin; Michael Vlassopoulos
  6. Optimal Compatibility in Systems Markets By Sang-Hyun Kim; Jay Pil Choi

  1. By: Andreas Karpf (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This article investigate the role of social influence for the expectation formation of economic agents. Using self-organizing Kohonen maps the repeated cross-section data set of the University of Michigan consumer survey is transformed into a pseudo panel allowing to monitor the expectation formation of cohorts with regard to business confidence over the whole available time span (January 1978 - June 2013). Subsequently the information theoretic concept of transfer entropy is used to reveal the role of social influence on the expectation formation as well as the underlying network structure. It is shown that social influence strongly depends on socio-demographic characteristics and also coincides with a high degree of connectivity. The social network estimated in this way follows a power-law and thus exhibits similar structure as networks observed in other contexts.
    Keywords: Social networks; expectations; household survey
    Date: 2014–02
  2. By: Daron Acemoglu; Asuman E. Ozdaglar; Alireza Tahbaz-Salehi
    Date: 2014–02–24
  3. By: Kevin Lewis; Kurt Gray; Jens Meierhenrich
    Abstract: Despite the tremendous amount of attention that has been paid to the internet as a tool for civic engagement, we still have little idea how “active” is the average online activist or how social networks matter in facilitating electronic protest. In this paper, we use complete records on the donation and recruitment activity of 1.2 million members of the Save Darfur “Cause” on Facebook to provide a detailed first look at a massive online social movement. While both donation and recruitment behavior are socially patterned, the vast majority of Cause members recruited no one else into the Cause and contributed no money to it-suggesting that in the case of the Save Darfur campaign, Facebook conjured an illusion of activism rather than facilitating the real thing.
    Keywords: social networks; social movements; social media; online activism; Facebook; Save Darfur
    JEL: L91 L96
    Date: 2014–02–18
  4. By: Juan de Lucio (High Council of Spanish Chambers of Commerce, Spain); Raúl Mínguez (High Council of Spanish Chambers of Commerce, Spain); Asier Minondo (Deusto Business School, Spain); Francisco Requena (University of Sheffield, United Kingdom)
    Abstract: In this paper we use network-analysis tools to identify communities in the web of exporters' destinations. Next we use our network-based community measure as predictor of additional countries chosen by firms expanding their export destination portfolio. We defend that our network-based community measure is superior to extended gravity measures. This superiority stems from the fact that community is a revealed measure, is country-specific and can be calculated at the industry level. Using data on Mexican new exporters over the period 2003-2009, we show that the probability of choosing a new export destination multiplies almost by three if it belongs to the same community of any of the firm's previous destinations. The introduction of the network-based community variable improves the accuracy of the model up to 20% relative to a model that only includes gravity and extended gravity variables. We also show that industry-specific communities and general communities play similar roles in determining the dynamics of Mexican exporters' country portfolio.
    Keywords: export market; network analysis; modularity; extended gravity; Mexico
    JEL: F1
    Date: 2014
  5. By: Sotiris Georganas; Mirco Tonin; Michael Vlassopoulos
    Abstract: Peer effects arise in situations where workers observe each others’ work activity. In this paper we disentangle the effect of observing a peer from that of being observed by a peer, by setting up a real effort experiment in which we manipulate the observability of performance. In particular, we randomize subjects into three groups: in the first one subjects are observed by another subject, but do not observe anybody; in the second one subjects observe somebody else’s performance, but are not observed by anybody; in the last group subjects work in isolation, neither observing, nor being observed. We consider both a piece rate compensation scheme, where pay depends solely on own performance, and a team compensation scheme, where pay also depends on the performance of other team members. Overall, we find some evidence that subjects who are observed increase productivity at least initially when compensation is team based, while we find that subjects observing react to what they see when compensation is based only on own performance.
    Keywords: peer effects, piece rate, team incentives, real-effort experiment
    JEL: D03 J24 M52 M59
    Date: 2014
  6. By: Sang-Hyun Kim (University of East Anglia); Jay Pil Choi (University of New South Wales)
    Abstract: We analyze private and social incentives for standardization to ensure market-wide system compatibility in a two-dimensional spatial competition model. It is shown that there is a fundamental conflict of interest between consumers and producers over the standardization decision. Consumers prefer standardization with full compatibility because it offers more variety that confers better match with their ideal specifications. However, firms are likely to choose the minimum compatibility to maximize product differentiation and soften competition. This is in sharp contrast to the previous literature that shows the alignment of private and social incentives for compatibility. We also characterize the free-entry equilibria under the maximum and the minimum compatibility. With free entry, more firms enter without standardization, but the number of available system variety is less than the one under standardization.
    Date: 2014–02

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