nep-net New Economics Papers
on Network Economics
Issue of 2016‒02‒04
eight papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Exclusionary Practices in Two-Sided Markets: The Effect of Radius Clauses on Competition Between Shopping Centers By Tim Brühn; Georg Götz
  2. Can a single theory explain coordination? An experiment on alternative modes of reasoning and the conditions under which they are used By Marco Faillo; Alessandra Smerilli; Robert Sugden
  3. Differential Peer Effects, Student Achievement, and Student Absenteeism: Evidence from a Large Scale Randomized Experiment By Ozkan Eren
  4. The role of networks in firms' multi-characteristics competition and market-share inequality By Antonios Garas; Athanasios Lapatinas
  5. Commercial Platforms With Heterogeneous Participants By Gabriel Garber; Márcio Issao Nakane
  6. The ecology of social interactions in online and offline environments By Angelo Antoci; Alexia Delfino; Fabio Paglieri; Fabio Sabatini
  7. Testimony on Network Neutrality to US Congress By Nicholas Economides
  8. Crisis, contagion and international policy spillovers under foreign ownership of banks By Michał Brzoza-Brzezina; Marcin Kolasa; Krzysztof Makarski

  1. By: Tim Brühn (University of Giessen); Georg Götz (University of Giessen)
    Abstract: This paper analyzes exclusionary conduct of platforms in two-sided markets. Motivated by recent antitrust cases against shopping centers introducing radius restrictions on their tenants, we provide a discussion of the likely positive and normative effects of exclusivity clauses, which prevent tenants from opening outlets in other shopping centers covered by the clause. In a standard two-sided market model with two competing shopping centers, we analyze incentives to introduce exclusivity clauses and the likely effects on social welfare. We show that exclusivity agreements are especially profitable for shopping centers and detrimental to social welfare if competition is intense between the two shopping centers. We argue that the focus of courts on market definition is misplaced in markets determined by competitive bottlenecks.
    Keywords: Platform competition, exclusive dealing, network effects, competitive bottlenecks
    JEL: D43 D62 L13
    Date: 2015
  2. By: Marco Faillo (University of Trento); Alessandra Smerilli (PFSE-Auxilium); Robert Sugden (University of East Anglia)
    Abstract: We investigate experimentally the conditions under which bounded best response and collective optimality reasoning are used in coordination games. Using level-k and team reasoning theories as exemplars, we study games with three pure-strategy equilibria, two of which are mutually isomorphic. The third is always team-optimal, but whether it is predicted by level-k theory differs across games. We find that collective optimality reasoning is facilitated if the collectively optimal equilibrium gives more equal payoffs than the others, and is inhibited if that equlibrium is Pareto-dominated by the others, considered separately. We suggest that coordination cannot be explained by a single theory.
    Keywords: team reasoning, level-k theory, coordination games
    JEL: C7 C9
    Date: 2016–01–18
  3. By: Ozkan Eren
    Abstract: Using data from a well-executed randomized experiment, we examine the effects of gender composition and peer achievement on high school students' outcomes in disadvantaged neighborhoods. Our results show that a higher proportion of female peers in the classroom improves girls' math test scores only in less advanced courses. For male students, the estimated gender peer effects are positive, but less precisely estimated. We also find no effect of average classroom achievement on female math test scores. Males, on the other hand, seem to benefit from a higher achieving classroom. We propose mechanisms relating to lower gender stereotype influences and gender-specific attitudes towards competition as potential expla- nations for our peer effects findings. Finally, it appears that a higher proportion of female students in the classroom decreases student absenteeism among male students without any impact on female attendance.
  4. By: Antonios Garas; Athanasios Lapatinas
    Abstract: We develop a location analysis spatial model of firms' competition in multi-characteristics space, where consumers' opinions about the firms' products are distributed on multilayered networks. Firms do not compete on price but only on location upon the products' multi-characteristics space, and they aim to attract the maximum number of consumers. Boundedly rational consumers have distinct ideal points/tastes over the possible available firm locations but, crucially, they are affected by the opinions of their neighbors. Our central argument is that the consolidation of a dense underlying consumers' opinion network is the key for the firm to enlarge its market-share. Proposing a dynamic agent-based analysis on firms' location choice we characterize multi-dimensional product differentiation competition as adaptive learning by firms' managers and we argue that such a complex systems approach advances the analysis in alternative ways, beyond game-theoretic calculations.
    Date: 2016–01
  5. By: Gabriel Garber; Márcio Issao Nakane
    Abstract: We study two-sided markets where there are buyers and sellers, with heterogeneous participants on each side. Buyers care about the quality of the good purchased, but sellers care only about the price they get. When there is informational asymmetry about types between the sides, the role of a platform as a certifier that guarantees a minimum quality becomes central to the transactions. We analyze first-best (perfect information) and pooling equilibria without platforms and a monopolist platform that coexists with an external pooling. We also show there is no equilibrium in a simultaneous game with two platforms
    Date: 2016–01
  6. By: Angelo Antoci; Alexia Delfino; Fabio Paglieri; Fabio Sabatini
    Abstract: The rise in online social networking has brought about a revolution in social relations. However, its effects on offline interactions and its implications for collective well-being are still not clear and are under-investigated. We study the ecology of online and offline interaction in an evolutionary game framework where individuals can adopt different strategies of socialization. Our main result is that the spreading of self-protective behaviors to cope with hostile social environments can lead the economy to non-socially optimal stationary states.
    Date: 2016–01
  7. By: Nicholas Economides (Department of Economics, Leonard N. Stern School of Business, New York University, 44 West 4th Street, New York 10012, NY, USA)
    Abstract: Network neutrality has facilitated businesses Innovation “at the edge of the Internet.” Network neutrality has contributed very significantly to the fast and vigorous growth of the high technology sector in the United States and the rest of the world. Departures from network neutrality, such as paid prioritization, are likely not to be in the public interest and to result in a number of detriments to the total benefits of the Internet ecosystem. I present a number of reasons why we should not be concerned about short term investment patterns. It seems very unlikely that these investment patterns are a result of the passage of the network neutrality rules.
    Keywords: network neutrality, two-sided markets, Internet, monopoly, price discrimination, regulation, AT&T, Verizon, Comcast, Time-Warner
    JEL: L1 D4 L12 L13 C63 D42 D43
    Date: 2015–10
  8. By: Michał Brzoza-Brzezina; Marcin Kolasa; Krzysztof Makarski
    Abstract: This paper checks how international spillovers of shocks and policies are modified when banks are foreign owned. To this end we build a twocountry macroeconomic model with banking sectors that are owned by residents of one (big and foreign) country. Consistently with empirical findings, we find that foreign ownership of banks amplifies spillovers from foreign shocks. It also strenghtens the international transmission of monetary and macroprudential policies. We next replicate the financial crisis in the euro area and show how, by preventing bank capital outflow in 2009, the Polish regulatory authorities managed to reduce its contagion to Poland. We also show that under foreign bank ownership such policy is strongly prefered to a recapitalization of domestic banks.
    Keywords: foreign-owned banks, monetary and macroprudential policy, international spillovers, DSGE models with banking
    JEL: E32 E44 E58
    Date: 2016

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