nep-net New Economics Papers
on Network Economics
Issue of 2016‒01‒03
seven papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Short-Term Liquidity Contagion in the Interbank Market By Carlos León; Constanza Martínez; Freddy Cepeda
  2. The importance of peers for compliance with norms of fair sharing By Simon Gaechter; Leonie Gerhards; Daniele Nosenzo
  3. An Extended N-player Network Game and Simulation of Four Investment Strategies on a Complex Innovation Network By Zhou, Wen; Koptyug, Nikita; Ye, Shutao; Jia, Yifan; Lu, Xiaolong
  4. Efficient networks for a class of games with global spillovers By Pascal Billand; Christophe Bravard; Jacques Durieu; Sudipta Sarangi
  5. Gender quotas or girls’ networks? Towards an understanding of recruitment in the research profession in Italy By D. Checchi; S. Cicognani; N. Kulic
  6. Social Network Analysis and Community Detection by Decomposing a Graph into Relaxed Cliques By Timo Gschwind; Stefan Irnich; Fabio Furini; Roberto Wol?er Calvo
  7. Do we need a global ‘central planner’ and ‘optimal’ economic policy for all? By Sergey Drobyshevsky

  1. By: Carlos León; Constanza Martínez; Freddy Cepeda
    Abstract: We implement a modified version of DebtRank, a measure of systemic impact inspired in feedback centrality, to recursively measure the contagion effects caused by the default of a selected financial institution. In our case contagion is a liquidity issue, measured as the decrease in financial institutions’ short-term liquidity position across the Colombian interbank network. Concurrent with related literature, unless contagion dynamics are preceded by a major –but unlikely- drop in the short-term liquidity position of all participants, we consistently find that individual and systemic contagion effects are negligible. We find that negative effects resulting from contagion are concentrated in a few financial institutions. However, as most of their impact is conditional on the occurrence of unlikely major widespread illiquidity events, and due to the subsidiary contribution of the interbank market to the local money market, their overall systemic importance is still to be confirmed.
    Keywords: Financial networks, contagion, default, liquidity, DebtRank.
    Date: 2015–12–24
  2. By: Simon Gaechter (Department of Economics, University of Nottingham.); Leonie Gerhards (Department of Economics, University of Hamburg); Daniele Nosenzo (Department of Economics, University of Nottingham.)
    Abstract: WA burgeoning literature in economics has started examining the role of social norms in explaining economic behavior. Surprisingly, the vast majority of this literature has studied social norms in asocial decision settings, where individuals are observed to act in isolation from each other. In this paper we use a large-scale dictator game experiment (N = 850) to show that the presence of “peers†in the decision setting faced by an individual can have a profound influence on the individual’s perception of the decision situation and its underlying norms of sharing, as elicited in an incentive compatible way. However, we find limited evidence that this influence of peers in normative considerations translates into a corresponding effect in actual behavior. Partly, this is due to substantial heterogeneity in the extent to which dictators in our sample are willing to comply with norms of fair sharing.
    Keywords: social norms, norm compliance, peer effects, fair sharing, dictator game, framing, experiments
    Date: 2015
  3. By: Zhou, Wen (School of Computer Engineering and Science); Koptyug, Nikita (Research Institute of Industrial Economics (IFN)); Ye, Shutao (School of Computer Engineering and Science); Jia, Yifan (School of Computer Engineering and Science); Lu, Xiaolong (School of Computer Engineering and Science)
    Abstract: As computer science and complex network theory develop, non-cooperative games and their formation and application on complex networks have been important research topics. In the inter-firm innovation network, it is a typical game behavior for firms to invest in their alliance partners. Accounting for the possibility that firms can be resource constrained, this paper analyzes a coordination game using the Nash bargaining solution as allocation rules between firms in an inter-firm innovation network. We build an extended inter-firm n-player game based on nonidealized conditions, describe four investment strategies and simulate the strategies on an inter-firm innovation network in order to compare their performance. By analyzing the results of our experiments, we find that our proposed greedy strategy is the best-performing in most situations. We hope this study provides a theoretical insight into how firms make investment decisions.
    Keywords: Complex Networks; Game Theory; Innovation; Innovation Network; Nash Equilibrium
    JEL: C72 C81 C82 D81 L14
    Date: 2015–12–15
  4. By: Pascal Billand (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Christophe Bravard (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Institut national de la recherche agronomique (INRA) - Université Grenoble Alpes - Grenoble 2); Jacques Durieu (CREG - Centre de recherche en économie de Grenoble - Grenoble 2 UPMF - Université Pierre Mendès France); Sudipta Sarangi (DIW - Deutsches Institut fur Wirtschaftsforschung, LSU - Louisiana State University at Baton Rouge)
    Abstract: In this paper we examine efficient networks in network formation games with global spillovers that satisfy convexity and sub-modularity properties. Unlike the previous literature we impose these properties on individual payoff functions. We establish that efficient networks of this class of games are nested split graphs. This allows us to complete the work of Goyal and Joshi (2006) and Westbrock (2010) on collaborative oligopoly networks.
    Keywords: networks, effi ciency, convexity, sub - modularity, oligopolies
    Date: 2015
  5. By: D. Checchi; S. Cicognani; N. Kulic
    Abstract: This article investigates the role of the gender composition of selection committees and networks in promoting women in research activities. We exploit a novel data set on recruitment processes at entry-level research positions in a leading Italian research centre that mainly operates in hard science. We find some evidence of discrimination against women at non-tenured entry levels, which is attenuated (or even reversed) by the presence of a woman on the selection committee. However, the most important predictor for recruitment seems to be previous connections with the research centre, which also serves as an important mechanism for women to enter the research profession. We conclude that quotas could be a solution for gender-biased preferences towards same-sex candidates in selection committees for non-tenure-track positions. Moreover, more gender-neutral networks would be another mechanism to bring more equality between men and women in research.
    JEL: J16 J71 J45
    Date: 2015–12
  6. By: Timo Gschwind (Johannes Gutenberg University Mainz); Stefan Irnich (Johannes Gutenberg University Mainz); Fabio Furini (Université Paris Dauphine); Roberto Wol?er Calvo (Universit´e de Paris Nord)
    Abstract: In social network analysis (SNA), relationships between members of a network are encoded in an undirected graph where vertices represent the members of the network and edges indicate the existence of a relationship. One important task in SNA is community detection, that is, clustering the members into communities such that relatively few edges are in the cutsets but relatively many are internal edges. The clustering is intended to reveal hidden or reproduce known features of the network, while the structure of communities is arbitrary. We propose decomposing a graph into the minimum number of relaxed cliques as a new method for community detection especially conceived for cases in which the internal structure of the community is important. Cliques, that is, subgraphs with pairwise connected vertices, can model perfectly cohesive communities, but often they are overly restrictive because many real communities form dense but not complete subgraphs. Therefore, different variants of relaxed cliques have been de?ned in terms of vertex degree and distance, edge density, and connectivity. They allow to impose application-speci?c constraints a community has to ful?ll such as familiarity and reachability among members and robustness of the communities. Standard compact formulations fail in ?nding optimal solutions even for small instances of such decomposition problems. Hence, we develop exact algorithms based on Dantzig-Wolfe reformulation and branch-and-price techniques. Extensive computational results demonstrate the e?ectiveness of all components of the algorithms and the validity of our approach when applied to social network instances from the literature.
    Keywords: Graph decomposition, community detection, clique relaxations, social network analysis, branch-and-price
    Date: 2015–12–11
  7. By: Sergey Drobyshevsky (Gaidar Institute for Economic Policy)
    Abstract: Recently we see a growing interest to and debates on the role of international associations like G20 or BRICS in the global economic renewal and global economic governance. Along with this there is a lot of issues related to establishing new international financial institutions like the New Development Bank or the Asian Infrastructure Investment Bank. However, in our view, all these discussions are based on the experience of the preceding economic crises and false theoretical backgrounds. In the paper we consider the necessity of current processes as a natural response to a new systemic crisis and the probable secular stagnation in the global economy. We argue that because the situation is completely new for both academic economists and policy makers the appropriate response to the global economic challenges is to give more competition and independence to international institutions and national policies. Correspondingly, the role and tasks of G20, or BRICS, as well as role of the World Bank, the IMF, or the WTO should change. We see all those organizations rather as venues for presenting and discussion of domestically oriented national policies and cooperation of international financial organizations than ‘central planners’ aiming at elaborating jointly agreed policy favorable for all member countries.
    Keywords: Russian economy, secular stagnation, systemic crisis, BRICS, G20
    JEL: H12
    Date: 2015

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