nep-net New Economics Papers
on Network Economics
Issue of 2015‒04‒02
six papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Facebook use and individual well-being: Like me to make me happier! By Thierry Pénard; Alexandre Mayol
  2. Platform pricing and consumer foresight: The case of airports By Ricardo Flores-Fillol; Alberto Iozzi; Tommaso Valletti
  3. Net neutrality and inflation of traffic By Peitz, M.; Schütt, F.
  4. Cross-border interbank contagion in the European banking sector. By S. Gabrieli; D. Salakhova; G. Vuillemey
  5. Influence Networks and Public Goods By Dunia López-Pintado
  6. The Strength of Long Ties and the Weakness of Strong Ties: Knowledge diffusion through supply chain networks By TODO Yasuyuki; Petr MATOUS; INOUE Hiroyasu

  1. By: Thierry Pénard (CREM UMR CNRS 6211, University of Rennes 1, France); Alexandre Mayol (PSE, University Paris 1)
    Abstract: This paper aims to study how Facebook use influences individual well-being. We use a survey conducted on a representative sample of 2,000 French Facebook users. Our results show that Facebook interferes with subjective well-being through its effects on friendships and self-esteem. Hence we find a positive relation between receiving a great number of Likes and comments from Facebook friends and the level of life satisfaction. By contrast, people that would like to receive more Likes tend to be more unsatisfied with their life. The latter result suggests that Facebook use can exacerbate frustration and envy. Finally, the time spent on Facebook, the intensity of online interactions as well as the number of Facebook friends have no direct impact on life satisfaction. All these findings underlines the ambivalence of Facebook use with both positive and negative psychological effects on well-being.
    Keywords: dévaluation, Facebook, self esteem, well-being, Internet, online sociability
    Date: 2015–03
  2. By: Ricardo Flores-Fillol (Universitat Rovira i Virgili); Alberto Iozzi (DEF and CEIS, Università di Roma "Tor Vergata"); Tommaso Valletti (Imperial College London, DEF and CEIS, Università di Roma "Tor Vergata" & CEPR)
    Abstract: Airports have become platforms that derive revenues from both aeronautical and commercial activities. The demand for these services is characterized by a one-way complementarity in that only air travelers can purchase retail goods at the airport terminals. We analyze a model of optimal airport behavior in which this one-way complementarity is subject to consumer foresight, i.e., consumers may not anticipate in full the ex post retail surplus when purchasing a flight ticket. An airport sets landing fees, and, in addition, also chooses the retail market structure by choosing the number of retail concessions to be awarded. We find that, with perfectly myopic consumers, the airport chooses to attract more passengers via low landing fees, and also sets the minimum possible number of retailers in order to increase the concessions’ revenues, from which it obtains the largest share of profits. However, even a very small amount of anticipation of the consumer surplus from retail activities changes significantly the airport’s choices: the optimal airport policy is dependent on the degree of differentiation in the retail market. When consumers instead have perfect foresight, the airport establishes a very competitive retail market, where consumers enjoy a large surplus. This attracts passengers and it is exploited by the airport by charging higher landing fees, which then constitute the largest share of its profits. Overall, airport’s profits are maximal when consumers have perfect foresight.
    Keywords: two-sided markets, platform pricing, one-way demand complementarity, consumer foresight
    JEL: L1 L2 L93
    Date: 2015–03–24
  3. By: Peitz, M.; Schütt, F. (Tilburg University, Center For Economic Research)
    Abstract: Under strict net neutrality Internet service providers (ISPs) are required to carry<br/>data without any differentiation and at no cost to the content provider. We provide a simple framework with a monopoly ISP to evaluate different net neutrality rules. Content differs in its sensitivity to delay. Content providers can use congestion control techniques to reduce delay for their content, but do not take into account the effect of their decisions on the aggregate volume of traffic. As a result, strict net neutrality often leads to socially inefficient traffic inflation. We show that piece-meal departures from net neutrality, such as transmission fees or prioritization based on sensitivity to delay, do not necessarily improve efficiency. However, allowing the ISP to introduce bandwidth tiering and charge for prioritized delivery can implement the<br/>efficient allocation.
    Keywords: Net neutrality; network congestion; telecommunications,; uality of service
    JEL: L12 L51 L86
    Date: 2015
  4. By: S. Gabrieli; D. Salakhova; G. Vuillemey
    Abstract: This paper studies the scope for cross-border contagion in the European banking sector using true bilateral exposure data. Using a model of sequential solvency and liquidity cascades in networks, we analyze geographical patterns of loss propagation from 2008 to 2012. We study the distribution of contagion outcomes after a common shock and an exogenous bank default over simulated networks of actual long- and short-term claims. We exploit a novel and unique dataset of money market transactions estimated from TARGET2 payments data. Our results show the critical impact of the underlying network structure on the propagation of losses. An econometric analysis of the determinants of contagion shows that the position of a bank in the network and its exposure to the riskiest counterparties are significantly correlated with default outcomes, behind its own financial ratios.
    Keywords: Contagion, Interbank market, Stress Testing, Liquidity Hoarding, Counterparty Risk.
    JEL: G01 G21 G28 F36
    Date: 2015
  5. By: Dunia López-Pintado (Universidad Pablo de Olavide)
    Abstract: We consider a model of social interactions in which agents are assumed to acquire information from others through a certain sampling process that generates an influence network. These networks comprise a wide array of options depending on the level of correlation assumed between agents' in and out degree. We study the provision of public goods in influence networks and show that the equilibrium (of the corresponding best-shot game) always exists and it is unique. We derive further insights for this problem by performing a comparative statics analysis.
    Keywords: influence networks; public goods; out-degree; in-degree; best-shot game
    JEL: D85 H41
    Date: 2015–03
  6. By: TODO Yasuyuki; Petr MATOUS; INOUE Hiroyasu
    Abstract: This paper examines the effect of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion, using large firm-level panel data for Japan. We find that ties with distant suppliers improve productivity, as measured by sales per worker, possibly attributed to intermediates from distant firms embodying more diversified knowledge than from neighboring firms. Ties with neighboring clients also improve productivity, which may be a result of diffusion of disembodied knowledge from neighboring clients being more effective than from distant clients. By contrast, ties with distant suppliers and clients improve innovative capability, as measured by the number of patent applications, suggesting the importance of a diversity of knowledge from distant firms for innovation. In addition, the density of a firm's ego network, which is measured by how densely its supply chain partners transact with each other, is found to have a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. Overall, our results emphasize the importance of diversified partners in knowledge diffusion through supply chain networks.
    Date: 2015–03

This nep-net issue is ©2015 by Yi-Nung Yang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.