nep-net New Economics Papers
on Network Economics
Issue of 2014‒12‒13
eleven papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Electronic Health Information Exchange, Competition, and Network Effects By Sunita Desai
  2. Policy on the media platform industry: The analysis of pricing policies of internet media with two-sided market theory By Kim, Sung-min
  3. Hotelling Games on Networks: Efficiency of Equilibria By Gaëtan Fournier; Marco Scarsini
  4. Gossip: Identifying Central Individuals in a Social Network By Abhijit Banerjee; Arun G. Chandrasekhar; Esther Duflo; Matthew O. Jackson
  5. Impact of users' communities on broadband economics By Domingo, Albert; Oliver, Miquel
  6. Peer-Effects on Childhood Obesity: An Instrumental Variables Approach on Exogenously Assigned Peers By Asirvatham, Jebaraj; Thomsen, Michael; Nayga, Rodolfo M. Jr.; Rouse, Heather
  7. Food gifting, kinship networks and household food security By Sun, Shaoyan; An, Henry; Marcoul, Philippe
  8. Conformism and Self-Selection in Social Networks By Vincent Boucher
  9. Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees By Jonathan Gruber; Robin McKnight
  10. Which Club Should I Attend, Dad?: Targeted Socialization and Production By Facundo Albornoz; Antonio Cabrales; Esther Hauk
  11. Networks information in the civil wars By Estrada, Fernando

  1. By: Sunita Desai (The Wharton School University of Pennsylvania, Health Care Management & Economics, 3640 Locust Walk, 19104 Philadelphia, PA)
    Abstract: As in most industries, in health care, information is a competitive asset, and we expect that health care providers may have incentive to protect their information from competitors. This study aims to understand how this incentive to protect information may be a barrier to the development of a health information network. Health information networks are designed to facilitate electronic information sharing across health care providers. The electronic exchange of health information is widely considered a promising tool to improve quality, costs, and efficiency of health care. Federal and state governments have invested over $30 billion to support the development of health information networks and electronic health information sharing. However, uptake has been slow suggesting that barriers to adoption exist. We first develop a model of firms' decisions to enter a health information network given this potential loss of competitive advantage. Guided by implications of the model, we conduct a two part empirical analysis to test for evidence that providers may be reluctant to join a health information network out of competitive concern. First, we conduct a national hospital-level analysis. Second, we construct a novel data set to conduct a physician-level analysis focused on New York State. In both analyses, we find supporting evidence that competitive pressure may be a barrier to entry by health care firms. We discuss implications for policy and network design given our findings.
    Keywords: health, technology, networks
    JEL: I18 L14 L15
    Date: 2014–10
  2. By: Kim, Sung-min
    Date: 2014
  3. By: Gaëtan Fournier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - 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
  4. By: Abhijit Banerjee; Arun G. Chandrasekhar; Esther Duflo; Matthew O. Jackson
    Abstract: Can we identify the members of a community who are best- placed to diffuse information simply by asking a random sample of individuals? We show that boundedly-rational individuals can, simply by tracking sources of gossip, identify those who are most central in a network according to "diffusion centrality," which nests other standard centrality measures. Testing this prediction with data from 35 Indian villages, we find that respondents accurately nominate those who are diffusion central (not just those with many friends). Moreover, these nominees are more central in the network than traditional village leaders and geographically central individuals.
    JEL: D13 D85 L14 O12 Z13
    Date: 2014–08
  5. By: Domingo, Albert; Oliver, Miquel
    Abstract: Both users and operators are aiming for faster networks to host higher-quality contents. Legacy infrastructure models are still mainly based into facilities investment competition. The large investment to deploy a new network into the market has been a huge barrier for new entrants and it has moved regulators to favor infrastructure sharing and unbundling models to seek for competition. Moreover, the in-building deployment problems and the high costs of civil-works are hindering the optical fiber deployment to the home. On the other hand, the high demand for broadband creates new consumer habits towards digital contents and does not only rely on the network access technology to get connected. This need brings new opportunities for more innovative deployment models. This paper estimates the impact of having the end-users more actively involved in the deployment of fiber networks to reduce the overall investment. The techno-economic model drawn in this paper is based in the self-aggregation of users to share a broadband connection. More precisely, the model consists of a neighboring community of users that decides to build their own in-building access network to share a single broadband Internet connection. Services that are offered over the top of the network are contracted individually by end-user. The model allows comparing the effect of users contracting their Internet access in an aggregated way (at community/building level) in a highly competitive scenario. As noticed above, the expected effect of the involvement of users as a key element of a fiber network is to lower the overall investment up to a 45% mainly sustained by communities that will afford the in-building access network costs. The article analyzes the effect of users sharing a single connection that can lead to operator's reducing the risk and the length of the investment. It has been measured the investment length in terms of positive net present value, ROI over a certain interest rate and the payback period as the main indicators to explore how the higher engagement affects the deployment model in terms of risks and returns. In some cases, the investment periods increase by a factor of three or even can become non-sustainable if there is the pricing strategy ignores the aggregated demand. In addition to the new access network scenario, the model has implications on pricing, which directly affects the return of investment from the operator's side. In that way, the paper also compares the effect of keeping the same pricing scheme for individual and user-aggregate retail offer, to another pricing scheme that differentiates the offers for single users and communities.
    Keywords: Broadband,Techno-economic,FFTH,FTTH,Statistical multiplexing
    Date: 2014
  6. By: Asirvatham, Jebaraj; Thomsen, Michael; Nayga, Rodolfo M. Jr.; Rouse, Heather
    Abstract: This study investigates whether peers are a contributing factor in childhood body-weight outcomes. Using an instrumental variables method on exogenously assigned peers, we find that the weight of peers within the same grade and school significantly impacts body mass index (BMI) z-score of an individual student. A typical student’s BMI z-score increases when facing heavier peers. The size of the peer-effect, however, is very modest. For a percentage point increase in the proportion of obese students in the same grade, a typical student’s BMI z-score increases by only 0.00341 standard deviations.
    Keywords: peer-effects, childhood obesity, social networks, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics, D10, I10, Z13,
    Date: 2014
  7. By: Sun, Shaoyan; An, Henry; Marcoul, Philippe
    Keywords: Food gifting, kinship networks, food security, risk-reducing, risk-coping, Consumer/Household Economics, Food Security and Poverty,
    Date: 2014
  8. By: Vincent Boucher
    Abstract: I present a model of conformism in social networks that incorporates both peer effects and self-selection. I find that equilibrium behaviors are linked through the Laplacian matrix of the equilibrium network. I show that conformism has positive social value and that social welfare can be bounded by network centrality and connectivity measures. I apply the model using empirical data on high school student participation in extracurricular activities. I find that the local effects of conformism (i.e. endogenous peer effect for a fixed network structure) range from 7.5% to 45%, depending on the number of peers that an individual has. Simulations show that the optimal policies of an inequality-averse policy-maker change in relation to the size of a school. Small schools should encourage shy students to integrate more with other students, while large schools should focus on promoting role models within the school.
    Keywords: Conformism, peer effects, network formation
    JEL: D85 C31
    Date: 2014
  9. By: Jonathan Gruber; Robin McKnight
    Abstract: Recent years have seen enormous growth in limited network plans that restrict patient choice of provider, particularly through state exchanges under the ACA. Opposition to such plans is based on concerns that restrictions on provider choice will harm patient care. We explore this issue in the context of the Massachusetts GIC, the insurance plan for state employees, which recently introduced a major financial incentive to choose limited network plans for one group of enrollees and not another. We use a quasi-experimental analysis based on the universe of claims data over a three-year period for GIC enrollees. We find that enrollees are very price sensitive in their decision to enroll in limited network plans, with the state's three month "premium holiday" for limited network plans leading 10% of eligible employees to switch to such plans. We find that those who switched spent considerably less on medical care; spending fell by almost 40% for the marginal complier. This reflects both reductions in quantity of services used and prices paid per service. But spending on primary care actually rose for switchers; the reduction in spending came entirely from spending on specialists and on hospital care, including emergency rooms. We find that distance traveled falls for primary care and rises for tertiary care, although there is no evidence of a decrease in the quality of hospitals used by patients. The basic results hold even for the sickest patients, suggesting that limited network plans are saving money by directing care towards primary care and away from downstream spending. We find such savings only for those whose primary care physicians are included in limited network plans, however, suggesting that networks that are particularly restrictive on primary care access may fare less well than those that impose only stronger downstream restrictions.
    JEL: I13
    Date: 2014–09
  10. By: Facundo Albornoz; Antonio Cabrales; Esther Hauk
    Abstract: We study a model that integrates productive and socialization efforts with network choice and parental investments. We characterize the unique symmetric equilibrium of this game. We first show that individuals underinvest in productive and social effort, but that solving only the investment problem can exacerbate the misallocations due to network choice, to the point that it may generate an even lower social welfare if one of the networks is sufficiently disadvantaged. We also study the interaction of parental investment with network choice. We relate these equilibrium results with characteristics that we find in the data on economic co-authorship and field transmission between advisors and advisees.
    Keywords: peer effects, network formation, cultural identity, parental involvement, immigrant sorting
    JEL: I20 I28 J15 J24 J61
    Date: 2014–11
  11. By: Estrada, Fernando
    Abstract: The aim of this paper is to interpret the relationships between information networks and the civil wars (Colombia). Over a period of paramilitary violence networks of informants were used with a strategic purpose. In fact, the paramilitaries were preparing each slaughter counting information previously learned between the inhabitants of the town. For these reasons, it is shown that information is a key phenomenon to understand civil wars. Moreover, as demonstrated in this work is the evolution of the slaughter in the civil wars as a result of rumor and information.
    Keywords: Civil wars, massacres, paramilitary, information, rumors, Colombia, communication.
    JEL: D7 D74 H7 Z0 D89 D82 D8 D85
    Date: 2014

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