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on Network Economics |
| By: | Xiaobing Feng; Haibo Hu |
| Abstract: | The negative externalities from an individual bank failure to the whole system can be huge. One of the key purposes of bank regulation is to internalize the social costs of potential bank failures via capital charges. This study proposes a method to evaluate and allocate the systemic risk to different countries/regions using a SIR type of epidemic spreading model and the Shapley value in game theory. The paper also explores features of a constructed bank network using real globe-wide banking data. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1404.5689&r=net |
| By: | Hannu Salonen (Department of Economics, University of Turku) |
| Abstract: | We study non-cooperative link formation games in which players have to decide how much to invest in relationships with other players. A link between two players is formed, if and only if both make a positive investment. The cost of forming a link can be interpreted as the opportunity cost of privacy. We analyze the existence of pure strategy equilibria and the resulting network structures with tractable specifications of utility functions. Sufficient conditions for the existence of reciprocal equilibria are given and the corresponding network structure is analyzed. Pareto optimal and strongly stable network structures are studied. It turns out that such networks are often complete. |
| Keywords: | link formation games, reciprocal equilibrium, complete network |
| JEL: | C72 D43 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp89&r=net |
| By: | Pierre-Alexandre Balland; José Antonio Belso-Martínez; Andrea Morrison |
| Abstract: | Although informal knowledge networks have often been regarded as a key ingredient behind the success of industrial clusters, the forces that shape their structure and dynamics remain largely unknown. Drawing on recent network dynamic models, we analyze the evolution of business and technical informal networks within a toy cluster in Spain. Empirical results suggest that the dynamics of the two networks differ to a large extent. We find that status drives the formation of business networks, proximity is more crucial for technical networks, while embeddedness plays an equally important role in the dynamics of business and technical networks. |
| Keywords: | Knowledge networks, industrial clusters, network dynamics, toy industry |
| JEL: | D85 B52 O18 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1412&r=net |
| By: | Sabatini, Fabio; Sarracino, Francesco |
| Abstract: | We add to the literature by conducting the first empirical assessment of how online networking affects two economically relevant aspects of social capital, i.e. trust and sociability, in a large and representative sample. We address endogeneity in online networking by exploiting technological characteristics of the pre-existing voice telecommunication infrastructures that exogenously determined the availability of broadband for high-speed Internet. 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. We argue that the rising practice of hate speech may play a crucial role in the destruction of trust. |
| Keywords: | social participation; online networks; Facebook; social trust; social capital; broadband; digital divide; hate speech |
| JEL: | C36 D85 O33 Z13 |
| Date: | 2014–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55722&r=net |
| By: | Gaëtan Fournier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne); Marco Scarsini (Engineering and System Design Pillar - Singapore University of Technology and Design) |
| Abstract: | We consider a Hotelling game where a finite number of retailers choose a location, given that their potential customers are distributed on a network. Retailers do not compete on price but only on location, therefore each consumer shops at the closest store. We show that when the number of retailers is large enough, the game admits a pure Nash equilibrium and we construct it. We then compare the equilibrium cost bore by the consumers with the cost that could be achieved if the retailers followed the dictate of a benevolent planner. We perform this comparison in term of the induced price of anarchy, i.e., the ratio of the worst equilibrium cost and the optimal cost, and the induced price of stability, i.e., the ratio of the best equilibrium cost and the optimal cost. We show that, asymptotically in the number of retailers, these ratios are two and one, respectively. |
| Keywords: | Induced price of anarchy; induced price of stability; location games on networks; pure equilibria; large games |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00983085&r=net |