nep-net New Economics Papers
on Network Economics
Issue of 2015‒01‒03
five papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Network Effects of Air Travel Demand, Second Version By Yanhao Wei
  2. Neighborhood and Network Effects By Topa, Giorgio; Zenou, Yves
  3. Network Monitoring and Punishment in Public Goods Experiments By Luke Boosey; R. Mark Isaac
  4. Quality Competition among Platforms: a Media Market Case By Serena Marianna Drufuca; Maria Rosa Battaggion
  5. Masses, crowds, communities, movements: Collective formations in the digital age By Dolata, Ulrich; Schrape, Jan Felix

  1. By: Yanhao Wei (Department of Economics, University of Pennsylvania)
    Abstract: As demand increases, airline carriers often increase flight frequencies to meet the larger flow of passengers in their networks, which reduces passengers' schedule delays and attracts more demand. Focusing on the “network effects", this paper develops and estimates a structural model of the U.S. airline industry. Compared with previous studies, the model implies higher cost estimates, which seem more consistent with the unprofitability of the industry; below-marginal-cost pricing becomes possible and appears on many routes. I also study airline mergers and find that the network effects can be the main factor underlying their profitability.
    Keywords: Network effects, airline networks, differentiated product markets, airlines, merger
    JEL: L13 L93 D62 C31
    Date: 2014–09–25
  2. By: Topa, Giorgio; Zenou, Yves
    Abstract: In this chapter, we provide an overview of research on neighborhoods and social networks and their role in shaping behavior and economic outcomes. We include discussion of empirical and theoretical analyses of the role of neighborhoods and social networks in crime, education and labor-market outcomes. In particular, we discuss in detail identification problems in peer, neighborhood and network effects and the policy implications of integrating the social and the geographical space, especially for ethnic minorities.
    Keywords: ethnic minorities; group-based policies; labor economics; neighborhoods; social networks
    JEL: C23 D85 J15 J64 K42 R14 Z13
    Date: 2014–09
  3. By: Luke Boosey (Department of Economics, Florida State University); R. Mark Isaac (Department of Economics, Florida State University)
    Abstract: We report experimental findings on the impact of network structure on decentralized monitoring and punishment in public goods games. In the environment we study, individuals can only directly monitor and punish their immediate neighbors in an exogenously determined network. We examine contributions and punishment decisions in a Complete network, a Circle network, and an Asymmetric network. Average contributions are lower in the Asymmetric network, although this result is driven entirely by the player who faces only one potential punisher. We also examine whether asymmetry in the network leads some punishers to discriminate between their potential targets. After controlling for targets' contribution decisions, we find limited support for this hypothesis. However, the data indicate that some punishers may be deterred from issuing discriminatory punishment by undermonitored targets who retaliate against previous punishment more often than others. Thus, we identify an additional complication of asymmetry in the network - that it may facilitate more targeted revenge by under-monitored players.
    Keywords: networks, public goods, punishment, revenge
    JEL: C72 C91 C92 H41
    Date: 2014–12
  4. By: Serena Marianna Drufuca; Maria Rosa Battaggion
    Abstract: We provide a two-sided model in a vertical di§erentiation context. We solve the model and we calculate the equilibrium in terms of advertising levels, subscription fees and qualities provision, both in duopoly - two platforms of different quality - and in monopoly case. We would like to investigate how competition among platforms and the entry deterrence behavior might a§ect the equilibrium, with particular focus on quality provision.
    Keywords: two-sided market, media; quality
    JEL: D42 D43 L15 L82
    Date: 2014
  5. By: Dolata, Ulrich; Schrape, Jan Felix
    Abstract: From prosumers to swarms, crowds, e-movements and e-communities, the Internet allows for new forms of collective behavior and action anywhere on the spectrum between individuals and organizations. In all of these cases, online technologies function as connectivityenhancing tools and have prompted the search for novel or inherently different collective formations and actors on the web. However, research to date on these new collective formations on the web lacks a sociologically informed and theoretical focus. Instead, loosely defined terms such as "swarm", "crowd" or "network" are readily used as a catch-all for any formation that cannot be characterized as a stable corporate actor. Such terms contribute little to an understanding of the vast range of collective activities on the Internet, namely because the various collective formations differ significantly from each other with regard to their size, internal structure, interaction, institutional dynamics, stability and strategic capability. In order to bridge this gap, this study investigates two questions: One, how might the very differently structured collectives on the Internet be classified and distinguished along actor- or action-centered theory? And two, what influence do the technological infrastructures in which they operate have on their formation, structure and activities? For this we distinguish between two main types of collectives: non-organized collectives, which exhibit loosely-coupled collective behavior, and collective actors with a separate identity and strategic capability. Further, we examine the newness, or distinctive traits, of online-based collectives, which we identify as being the strong and hitherto non-existent interplay between the technological infrastructures that these collectives are embedded in and the social processes of coordination and institutionalization they must engage in in order to maintain their viability over time. Conventional patterns of social dynamics in the development and stabilization of collective action are now systematically intertwined with technology-induced processes of structuration.
    Abstract: Dieses Discussion Paper geht den beiden Fragen nach, wie sich die sehr unterschiedlich strukturierten kollektiven Gebilde im Internet - beispielsweise Swarms, Crowds, Social Networks, E-Communities, E-Movements - akteur- bzw. handlungstheoretisch einordnen und voneinander abgrenzen lassen und welchen Einfluss die technologischen Infrastrukturen, in denen sie sich bewegen, auf ihre Entstehung, Strukturierung und Aktivität haben. Dazu wird zunächst zwischen zwei wesentlichen Varianten kollektiver Formationen unterschieden, die als nicht-organisierte Kollektive und als strategiefähige kollektive Akteure charakterisiert werden. Daran anknüpfend wird herausgearbeitet, was das Neue ist, das kollektive Formationen im Internet auszeichnet: Es besteht in einer so zuvor nicht gekannten Verschränkung nach wie vor unverzichtbarer sozialer Konstitutions-, Koordinations- und Institutionalisierungsprozesse mit den technischen Infrastrukturen, die das Netz bietet. Klassische soziale Entstehungs- und Organisierungsmuster kollektiven Verhaltens bzw. Handelns mischen sich im Online-Kontext systematisch mit eigenständigen technischen Strukturierungsleistungen.
    Date: 2014

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