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on Network Economics |
| By: | Selman Erol (Department of Economics, University of Pennsylvania); Rakesh Vohra (Department of Economics, and Department of Electrical & Systems Engineering, University of Pennsylvania) |
| Abstract: | This paper introduces a model of endogenous network formation and systemic risk. In it, strategic agents form networks that efficiently trade-off the possibility of systemic risk with the benefits of trade. Efficiency is a consequence of the high risk of contagion which forces agents to endogenize their externalities. Second, fundamentally ‘safer’ economies generate much higher interconnectedness, which in turn leads to higher systemic risk. Third, the structure of the network formed depends crucially on whether the shocks to the system are believed to be correlated or independent of each other. This underlines the importance of specifying the shock structure before investigating a given network as a particular network and shock structure could be incompatible. |
| Keywords: | Network Formation, Systemic Risk, Contagion, Rationalizability, Core |
| JEL: | D85 G01 |
| Date: | 2014–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:15-001&r=net |
| By: | Valenciano Llobera, Federico; Olaizola Ortega, María Norma |
| Abstract: | We provide a model that bridges the gap between two benchmark models of strategic network formation: Jackson and Wolinsky' s model based on bilateral formation of links, and Bala and Goyal's two-way fl ow model, where links can be unilaterally formed. In the model introduced and studied here a link can be created unilaterally. When it is only supported by one of the two players the fl ow through the link suffers a certain decay, but when it is supported by both the fl ow runs without friction. When the decay in links supported by only one player is maximal (i.e. there is no flow) we have Jackson and Wolinsky 's connections model without decay, while when flow in such links is perfect we have Bala and Goyal' s two-way flow model. We study Nash, strict Nash and pairwise stability for the intermediate models. Efficiency and dynamics are also examined. |
| Keywords: | network formation, unilateral link-formation, bilateral link-formation, stability, efficiency, dynamics |
| JEL: | J00 D20 A14 C72 |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:ikerla:13425&r=net |
| By: | Clément Bosquet; Pierre-Philippe Combes |
| Abstract: | We study the effect of a large set of department characteristics on individual publication records. We control for many individual time-varying characteristics, individual fixed-effects and reverse causality. Department characteristics have an explanatory power that can be as high as that of individual characteristics. The departments that generate most externalities are those where academics are homogeneous in terms of publication performance and have diverse research fields, and, to a lesser extent, large departments, with more women, older academics, star academics and foreign co-authors. Department specialisation in a field also favours publication in that field. More students per academic does not penalise publication. At the individual level, women and older academics publish less, while the average publication quality increases with average number of authors per paper, individual field diversity, number of published papers and foreign co-authors. |
| Keywords: | productivity determinants; economic geography; networks; economics of science; selection and endogeneity |
| JEL: | I3 J24 R12 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58306&r=net |