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on Network Economics |
| By: | Athanasopoulos, Thanos (Department of Economics, University of Warwick) |
| Abstract: | This paper analyses firms’ behaviour towards compatibility and the relation of these decisions with their incentives to invest into improving their durable, network goods. By using a sequential game where the dominant firm plays first, we give its competitor the ability to build on innovations previously introduced by the market leader. Recognizing the intertemporal linkage in forward looking customers’purchasing choices, we find that in anticipation of a relatively large quality improvement by the rival, strategic pricing leads the dominant firm to support compatibility even if it could exclude its rivals by using a patent for its invention. Furthermore, not only doesn’t interoperability de-facto maximise social welfare but we also identify no market failure when network effects are not particularly strong. Key words: Firms ; Pricing ; Compatibility ; Innovation ; Technological Change ; Intellectual Property Rights ; Antitrust Law ; Competition ; Externalities ; Product Durability ; Welfare JEL classification: D43 ; L13 ; D71 ; D62 ; L15 ; L4 ; K21 ; L51 ; O34 ; O31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1043&r=net |
| By: | Richard Bennett (American Enterprise Institute) |
| Abstract: | American citizens are far ahead of government agencies and holdout populations such as the elderly in transitioning to new networking technologies. The FCC should revise its Internet Protocol Technology Transitions Order to, among other things, accelerate the adoption of IP technologies in the realms of public safety, defense, and aviation. |
| Keywords: | network services,government,FCC,Broadband networks,Broadband access |
| JEL: | A O |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:aei:rpaper:40736&r=net |
| By: | Baggio Rodolfo (Department of Policy Analysis and Public Management, Bocconi University); Sheresheva Marina (Department of Economics, Lomonosov Moscow State University) |
| Abstract: | This article focuses on the interdisciplinary nature of the emerging network paradigm in economic and management sciences. The intersection of different approaches is unveiled, including those with roots in the natural sciences. The authors briefly describe the contribution of different disciplines in the development of research methodology applied to network forms widespread in contemporary economy. The second part presents an example of using techniques originally applied to solve the problems of theoretical physics to the study of tourism business networks. Conclusions are drawn about the prospects for an interdisciplinary approach in shaping the science of networks. |
| Keywords: | network, coordination mechanism, network approach |
| JEL: | A10 C00 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:upa:wpaper:0011&r=net |
| By: | Andrej Svorenčík |
| Abstract: | The core question of MIT Economics Department’s history – why has MIT economics risen to prominence so quickly – requires an approach to history of economics that focuses on the role of the networks within which economists operate, their ideas diffuse, and gain scientific credit. By reconstructing the network of MIT economics Ph.Ds. and their advisors, this paper furnishes not just evidence of how MIT rose to prominence as documented by the numerous ties of Nobel Laureates, Clark Medalists, elected officials of the AEA or the Council of Economic Advisors to the MIT network. The MIT Economics Department is also revealed as a community of self-replicating economists who are to a large extent trained by a few key advisers who were mostly trained at MIT as well. MIT exhibits a large share of graduates who remain in American academia that is disproportionate to the number of graduates it has produced. It is hypothesized that this has been an important factor in MIT’s rise to prominence. On a methodological level this paper introduces prosopography or collective biography, a well-established historiographic method, to the field of history of economics. |
| Keywords: | MIT, networks of economists, advisor-advisee relations, prosopography, collective biography |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hec:heccee:2013-19&r=net |
| By: | Berno Buechel; Lydia Mechtenberg; Julia Petersen; |
| Abstract: | We conducted a multi-wave field experiment to study the interaction of peer effects and selfcontrol among undergraduate students. We use a behavioral measure of self-control based on whether students achieve study related goals they have set for themselves. We find that both self-control and the number of talented friends increase students’ performance. We then set out to test the theoretical prediction of Battaglini, Bénabou and Tirole (2005) that (only) sufficiently self-controlled individuals profit from interactions with peers. We find that peers with high self-control are more likely to connect to others, have a higher overall number of friends and have a higher number of talented friends. Moreover, positive news about self-controlled behavior of their peers increases students’ own perseverance. Hence, our findings are consistent with the model of Battaglini, Bénabou and Tirole. In addition, we find that female students are more likely to have high self-control, but do not outperform male students. One reason for this is that female students have a lower number of talented friends than their male counterparts, thereby profiting less from positive peer effects. |
| Keywords: | Self-control, Peer Influence, Social Networks, Goals, Time preferences, Procrastination, Willpower, School Performance, Experiment |
| JEL: | C93 D85 I21 J24 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2014-024&r=net |
| By: | Wolfgang Kerber (University of Marburg); Julia Wendel (University of Marburg) |
| Abstract: | The vertical allocation of regulatory powers within the European two-level system of network sector regulation is analysed from the perspective of the economic theory of legal federalism. The analysis shows that sophisticated combinations of harmonised European rules along with sufficient scope for decentralised decisions of national regulators seem to be optimal. Especially interesting is that networks of regulatory authorities (as BEREC in telecommunications) can play an important role in regard to balancing the advantages and disadvantages of (de)centralisation. Whereas in regard to telecommunication a further shifting of regulatory powers to the EU level cannot be recommended, both in energy and railway markets it might still be necessary to strengthen the regulatory power of the EU. |
| Keywords: | EU sector regulation, legal federalism, regulatory networks, telecommunication |
| JEL: | K23 H77 F15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201422&r=net |
| By: | Alexey Kushnir; Alexandru Nichifor |
| Abstract: | We introduce a simple two-stage game of endogenous network formation and information sharing for reasoning about the optimal design of social networks like Facebook or Google+. We distinguish between unilateral and bilateral connections and between targeted and collective information sharing. Agents value being connected to other agents and sharing and receiving information. We consider multiple utility specifications. We show that the game always has an equilibrium in pure strategies and then we study how the network design and the utility specifications affect welfare. Surprisingly, we find that in general, targeted information sharing is not necessarily better than collective information sharing. However, if all agents are either "babblers" or "friends", irrespective of whether the network is unilateral or bilateral, in equilibrium, targeted information sharing yields higher welfare than collective information sharing. |
| Keywords: | Networks, network formation, unilateral connections, bilateral connections, targeted information sharing, collective information sharing, Google, Facebook, babblers, friends |
| JEL: | D85 C72 C62 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:152&r=net |
| By: | Mauro Napoletano (OFCE); Mario V Tomasello; Antonios Garas; Frank Schweitzer (Chair of Systems Design) |
| Abstract: | Drawing on a large database of publicly announced R&D alliances, we track the evolutionof R&D 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 statisticalproperties of empirical R&D networks. By studying a large set of indicators, we providea more complete description of these networks with respect to the existing literature. Wefind that most network properties are invariant across sectors. In addition, they do notchange when alliances are considered independently of the sectorsto which partners belong.Moreover, we find that many properties of R&D networks are characterized by a rise-and-fall dynamics with a peak in the mid-nineties. Finally, we show that suchproperties of empirical R&D networks support predictions of the recent theoretical literature on R&D network formation. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/f6h8764enu2lskk9p5487a6cm&r=net |
| By: | Oleg Poldin (National Research University Higher School of Economics); Diliara Valeeva (National Research University Higher School of Economics); Maria Yudkevich (National Research University Higher School of Economics) |
| Abstract: | We analyze the characteristics of the social networks of students studying in the economics department in one Russian university. We focus on student friendship and study assistance ties and demonstrate how these networks are connected with the individual characteristics of students and their peers. We find that the probability of a tie existing is explained by the gender homophily, and initial student assignment to the same exogenously defined study group. Students ask for help and form friendships with students who have similar academic achievements. Academically successful students are more popular in study assistance networks while there is no gender difference in student popularity in both networks. Our findings enhance the understanding of the role of friendship and study assistance ties in the formation of peer group effects |
| Keywords: | student achievement, social networks, peer group effects, higher education |
| JEL: | D85 I21 I23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:37/soc/2014&r=net |
| By: | Francis Bloch (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Gabrielle Demange (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Rachel Kranton (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)) |
| Abstract: | Why do people spread rumors? This paper studies the transmission of possibly false information---by rational agents who seek the truth. Unbiased agents earn payoffs when a collective decision is correct in that it matches the true state of the world, which is initially unknown. One agent learns the underlying state and chooses whether to send a true or false message to her friends and neighbors who then decide whether or not to transmit it further. The papers hows how a social network can serve as a filter. Agents block messages from parts of the network that contain many biased agents; the messages that circulate may be incorrect but sufficiently informative as to the correct decision. |
| Keywords: | Bayesian updating ; Rumors ; Misinformation ; Social networks |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00966234&r=net |
| By: | Catarina Roseira (FEP-U.Porto); Carla Ramos (Insper - Investigação e Ensino); Francisco Maia (FEP-U.Porto) |
| Abstract: | Abstract Networking represents a cornerstone for entrepreneurial action, nurturing relationships that provide access to necessary resources. Previous research shows that such relationships can be fostered as part of incubation processes. However, there is a lack of understanding of the underlying networking process, particularly in settings aimed at promoting them such as Networked Incubators (NIs). Moreover, little is known about entrepreneurs’ expectations when joining a NI, or about entrepreneurs’ satisfaction regarding the fulfilment of those expectations. We address these issues by investigating the features of networking within NIs, and by positing new ways of measuring incubator performance: performance from the entrepreneurs’ perspective. The article focuses on the start-ups located in UPTEC - Science and Technology Park of the University of Porto, a NI. A combination of qualitative and quantitative methodological tools (including content and social network analysis) is used. Findings show how entrepreneurs hold relatively high expectations for the dimensions of Legitimacy/Credibility, Infrastructure, and Networking, and lower expectations regarding the Business Support provided by the incubator. However, the UPTEC network shows low levels of Networking, raising questions regarding effectiveness of NIs. The findings also reveal a number of factors that impact the value and effectiveness of the networking process within a NI. |
| Keywords: | University Incubators; Networked Incubators; Business Networks; Value; Entrepreneurship; Social Network Analysis. |
| JEL: | M13 L24 L29 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:532&r=net |
| By: | Messan Agbaglah (Département d'économique, Université de Sherbrooke) |
| Abstract: | We introduce the game in cover function form, which is a bargaining game of sequential offers for endogenous overlapping coalitions. This extension of games in partition function form removes the restriction to disjoint coalitions. We discuss the existence of equilibria, and we develop an algorithm to compute equilibrium outcomes, under some conditions. We define the key properties that overlapping coalition structures must verify to uniquely identify networks. We show that each network is defined as an equilibrium outcome of a game in cover function form. Our results bridge the two strands of literature devoted to the formation networks and coalitions. |
| Keywords: | Overlapping coalitions, Bargaining, Network formation, Coalition formation, Game in cover function form, Symmetric game |
| JEL: | C72 C78 D62 D85 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:14-02&r=net |
| By: | Bluhm, Marcel; Faia, Ester; Krahnen, Jan Pieter |
| Abstract: | This paper makes a conceptual contribution to the e ffect of monetary policy on financial stability. We develop a microfounded network model with endogenous network formation to analyze the impact of central banks' monetary policy interventions on systemic risk. Banks choose their portfolio, including their borrowing and lending decisions on the interbank market, to maximize profit subject to regulatory constraints in an asset-liability framework. Systemic risk arises in the form of multiple bank defaults driven by common shock exposure on asset markets, direct contagion via the interbank market, and firesale spirals. The central bank injects or withdraws liquidity on the interbank markets to achieve its desired interest rate target. A tension arises between the bene ficial effects of stabilized interest rates and increased loan volume and the detrimental effects of higher risk taking incentives.We fi nd that central bank supply of liquidity quite generally increases systemic risk. -- |
| Keywords: | network formation,contagion,central banks' interventions |
| JEL: | C63 D85 G01 G28 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:46&r=net |
| By: | Somayeh Koohborfardhaghighi (College of Engineering, Seoul National University); Jorn Altmann (College of Engineering, Seoul National University) |
| Abstract: | The power of using knowledge against competitors is a key success factor in the information age. However, the knowledge itself is not the source of competitive advantage for an organization; rather its power lies in its use. In a learning organization, collective knowledge of the individuals is needed, in order to reach the overall goals of the organization. From an organizational perspective, the most important aspect of knowledge management is knowledge transfer. Therefore, knowledge within the organization should be available to others through social interactions. The contributions of this paper are two-fold: First, we show that the network structure that emerges from those social interactions depends on the variability in individual patterns of behavior. Second, we emphasize the importance of network structure changes for organizational learning. A consequence is that a high clustering coefficient within a network does not necessarily produce a high learning outcome. It can even result in a loss of innovation. Another consequence is that a small average shortest path length within a network of individuals positively affects organizational learning. Therefore, certain topological features of a network can help network members to have a better access to information within an organization. |
| Keywords: | Complex Networks, Organizational Learning, Knowledge Management, Network Formation. |
| JEL: | C02 C6 C15 D23 D81 D85 L22 L25 M12 O31 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:snv:dp2009:2014111&r=net |
| By: | Vasco Carvalho; Nico Voigtländer |
| Abstract: | What determines which inputs are initially considered and eventually adopted in the production of new or improved goods? Why are some inputs much more prominent than others? We model the evolution of input linkages as a process where new producers first search for potentially useful inputs and then decide which ones to adopt. A new product initially draws a set of ‘essential suppliers’. The search stage is then confined to the network neighborhood of the latter, i.e., to the inputs used by the essential suppliers. The adoption decision is driven by a tradeoff between the benefits accruing from input variety and the costs of input adoption. This has important implications for the number of forward linkages that a product (input variety) develops over time. Input diffusion is fostered by network centrality – an input that is initially represented in many network neighborhoods is subsequently more likely to be adopted. This mechanism also delivers a power law distribution of forward linkages. Our predictions continue to hold when varieties are aggregated into sectors. We can thus test them, using detailed sectoral US input-output tables. We show that initial network proximity of a sector in 1967 significantly increases the likelihood of adoption throughout the subsequent four decades. The same is true for rapid productivity growth in an input-producing sector. Our empirical results highlight two conditions for new products to become central nodes: initial network proximity to prospective adopters, and technological progress that reduces their relative price. Semiconductors met both conditions. |
| JEL: | C67 D57 E10 L23 O33 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20025&r=net |
| By: | Martha G. Alatriste Contreras; Giorgio Fagiolo |
| Abstract: | This paper investigates how economic shocks propagate and amplify through the input-output network connecting industrial sectors in developed economies. We study alternative models of diffusion on networks and we calibrate them using input-output data on real-world inter-sectoral dependencies for several European countries before the Great Depression. We show that the impact of economic shocks strongly depends on the nature of the shock and country size. Shocks that impact on final demand without changing production and the technological relationships between sectors have on average a large but very homogeneous impact on the economy. Conversely, when shocks change also the magnitudes of input-output across-sector interdependencies (and possibly sector production), the economy is subject to predominantly large but more heterogeneous avalanche sizes. In this case, we also find that: (i) the more a sector is globally central in the country network, the largest its impact; (ii) the largest European countries, such as those constituting the core of the European Union's economy, typically experience the largest avalanches, signaling their intrinsic higher vulnerability to economic shocks. |
| Keywords: | Complex networks, input-output networks, shock diusion, spreading mechanisms, avalances, economic crises |
| Date: | 2014–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2014/09&r=net |
| By: | Alin Halimatussadiah; Budy P. Resosudarmo; Diah Widyawati |
| Abstract: | Social capital is considered to be an important factor in economic development. It is argued that it generates a flow of (economic) benefits through collective action, by reducing free riding and increasing individual contribution. This study examines whether social capital increases individual contribution in a collective action situation. Using a classroom experiment, two games are played in a sequential manner: a trust game to measure level of trust–as a proxy for social capital–and a public goods game to measure individual contribution to collective action. In the public goods game, we apply some treatments to look at the impact of partial disclosure of a group member’s behaviour in the trust game on contributions in the public goods game. In general, the result shows that the level of social capital positively impacts individual contribution to collective action. However, we found no significant evidence to support the impact of partial disclosure of a group member's behaviour in the trust game on contributions in the public goods game. |
| Keywords: | Social Capital, Collective Action, Trust Game, Public Goods Game |
| JEL: | A14 C91 C92 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2014-03&r=net |
| By: | Damien Besancenot (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - CNRS : UMR7234 - Université Sorbonne Paris Cité (USPC)); Radu Vranceanu (Economics Department - ESSEC Business School) |
| Abstract: | In April 2013, all of the major academic publishing houses moved thousands of journal titles to an original hybrid model, under which authors of accepted papers can choose between an expensive open access track and the traditional track available only to subscribers. This paper argues that authors might use publication strategy as a quality signaling device. The imperfect information game between authors and readers presents several types of Perfect Bayesian Equilibria, including a separating equilibrium in which only authors of high quality papers are driven toward the open access track. The publishing house will choose the open-access publication fee that supports the emergence of the highest return equilibrium. Journal structures will evolve over time according to the journals' accessibility - quality profiles. |
| Keywords: | Academic publishing ; Open access ; Knowledge di¤usion ; Imperfect information ; Signaling |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00971541&r=net |