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on Network Economics |
| By: | Briglauer, Wolfgang; Gugler, Klaus; Haxhimusa, Adhurim |
| Abstract: | This paper employs firm-level panel data of 57 incumbent and entrant firms for 23 European countries in the decade from 2003 to 2012. We examine the impact of service- and facility-based competition on firm level investment as well as the strategic effects underlying infrastructure investment decisions. At the same time we explicitly model the structural dynamics of broadband investment using dynamic panel estimation techniques. We find that facility-based competition exerts a positive and significant impact on both incumbents and entrants implying that incumbents’ and entrants’ investment decisions are strategic complements. Moreover, this strategic complementarity is much more pronounced with respect to the entrants. Finally, we show that service-based competition appears to have no significant impact on the investment decision of incumbents and entrants and that there is no supportive evidence for the so-called “ladder of investment” hypothesis. With respect to the later phase of market regulation, service-based competition exerts a negative impact on entrants’ investment. |
| JEL: | L43 L52 L96 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse15:127130&r=net |
| By: | Betz, Frank; Hautsch, Nikolaus; Peltonen, Tuomas A.; Schienle, Melanie |
| Abstract: | We propose a framework for estimating time-varying systemic risk contributions that is applicable to a high-dimensional and interconnected financial system. Tail risk dependencies and systemic risk contributions are estimated using a penalized two-stage fixed-effects quantile approach, which explicitly links time-varying interconnectedness to systemic risk contributions. For the purposes of surveillance and regulation of financial systems, network dependencies in extreme risks are more relevant than simple (mean) correlations. Thus, the framework provides a tool for supervisors, reflecting the market's view of tail dependences and systemic risk contributions. The model is applied to a system of 51 large European banks and 17 sovereigns during the period from 2006 through 2013, utilizing both equity and CDS prices. We provide new evidence on how banking sector fragmentation and sovereign-bank linkages evolved over the European sovereign debt crisis, and how they are reflected in estimated network statistics and systemic risk measures. Finally, our evidence provides an indication that the fragmentation of the European financial system has peaked. |
| Keywords: | systemic risk contribution,tail dependence,network topology,sovereignbank linkages,Value-at-Risk |
| JEL: | G01 G18 G32 G38 C21 C51 C63 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:79&r=net |
| By: | Arnold, René; Waldburger, Martin; Morasch, Bastian; Schmid, Frieder; Schneider, Anna |
| Abstract: | In light of the lack of studies into the value of network neutrality to consumers, BEREC has commissioned a European (CR; CZ; EL; SE) mixed-methods study to explore this issue. This paper presents selected results of this study. To understand the value of network neutrality to European consumers, one first has to explore the role that the Internet plays in consumers’ lives. We find that whilst the Internet has become very important to the majority of consumers across the four test areas studied in this paper, its role in consumers’ lives differs greatly depending on the national culture, but also to some extent on the quality of Internet access available in the specific country. Consumers usually find being able to access all content and applications on the Internet fundamental to their quality of experience. They do not want to see their access restricted in any way, but many find it fair if emergency relief services or the police receive prioritised access. The same is true if others pay extra for prioritised access to specific applications as long as this does not compromise the experience of those who do not pay extra. Taking a closer look at consumers’ understanding and conceptualisation of network neutrality supports that consumers do not have a clear understanding of the concept. However, they care strongly about the effects deviations from network neutrality have for their own quality of experience or the quality of experience of others. The conjoint analysis conducted for this study highlights the importance of network neutrality-related product attributes for consumers’ purchase decisions. In fact, they make up around half of their purchase decisions for at home Internet access. A closer analysis of the part-worth utilities reveals a surprising preference for the best effort Internet access to applications over the prioritised one. It seems likely that this result is due to their lack of experience with prioritised services. The paper discusses various alternative explanations of this preference pattern. In line with expectations, the conjoint analysis also finds that any restrictions of consumers’ access results in a significantly reduced willingness-to-pay for their at home Internet access. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse15:127121&r=net |
| By: | Marco Bardoscia; Stefano Battiston; Fabio Caccioli; Guido Caldarelli |
| Abstract: | There is growing consensus that processes of market integration and risk diversification may come at the price of more systemic risk. Indeed, financial institutions are interconnected in a network of contracts where distress can either be amplified or dampened. However, a mathematical understanding of instability in relation to the network topology is still lacking. In a model financial network, we show that the origin of instability resides in the presence of specific types of cyclical structures, regardless of many of the details of the distress propagation mechanism. In particular, we show the existence of trajectories in the space of graphs along which a complex network turns from stable to unstable, although at each point along the trajectory its nodes satisfy constraints that would apparently make them individually stable. In the financial context, our findings have important implications for policies aimed at increasing financial stability. We illustrate the propositions on a sample dataset for the top 50 EU listed banks between 2008 and 2013. More in general, our results shed light on previous findings on the instability of model ecosystems and are relevant for a broad class of dynamical processes on complex networks. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1602.05883&r=net |
| By: | Charles W Calomiris; Mark A Carlson |
| Abstract: | The unit banking structure of the United States gave rise to a uniquely important interbank correspondent network, which linked banks throughout the country during the National Banking Era. During normal times, these interbank network relationships provided banks with access to money markets, facilitated payment processing, and helped banks meet legal reserve requirements. We collect and analyze data on individual correspondent relationships of national banks to map the structure of the network, identify the factors that led banks to adopt different correspondent network structures, and examine the consequences of network choices for bank liquidity risk. Banks' network profiles differed according to the range of services they needed or provided to their customers. For instance, banks providing more checking services focused their interbank relationships on banks in New York City, which was central to the payment clearing system. Location characteristics also mattered; banks in areas with more manufacturing firms maintained more network connections. Differences in network profiles propagated liquidity risk during the Panic of 1893, one of the most severe panics of the National Banking Era. Banks with relatively high two-sided interbank liquidity risk - those that both held more of their liquid assets with their correspondents and were funded to a greater extent by the deposits of other banks - were more likely to close. New York City banks suspended convertibility during the crisis. Banks that relied more heavily on New York correspondents as a source of liquidity were more likely to close. |
| Keywords: | interbank networks, correspondent banking, banking panics, contagion, National Banking Era |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:535&r=net |
| By: | Dettling, Lisa J. (Board of Governors of the Federal Reserve System (U.S.)); Goodman, Sarena (Board of Governors of the Federal Reserve System (U.S.)); Smith, Jonathan (College Board) |
| Abstract: | This paper investigates the effects of high-speed Internet on students' college application decisions. We link the diffusion of zip code-level residential broadband Internet to millions of PSAT and SAT takers' college testing and application outcomes and find that students with access to high-speed Internet in their junior year of high school perform better on the SAT and apply to a higher number and more expansive set of colleges. Effects appear to be concentrated among higher-SES students, indicating that while, on average, high-speed Internet improved students' postsecondary outcomes, it may have increased pre-existing inequities by primarily benefiting those with more resources. |
| Keywords: | Broadband; College Choice; Undermatch |
| Date: | 2015–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2015-108&r=net |
| By: | Bastien Bernela (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers); Béatrice Milard (LISST - Laboratoire Interdisciplinaire Solidarités, Sociétés, Territoires - EHESS - École des hautes études en sciences sociales - UT2 - Université Toulouse 2 - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The aim of this paper is to investigate the link between geographical mobility and co-authorship formation and dynamics. We propose a methodology based on matching bibliometric data and qualitative data recoded from CVs and semi-structured interviews. The case study of two prolific chemists (authors of 660 publications with 2,596 co-authors) located in the same laboratory shows that the difference in mobility behaviour does not have a strong incidence on the geography of their co-authorship. |
| Keywords: | Mobility of researchers,Co-authorship dynamics,Collaboration network,Linkage process,Data matching |
| Date: | 2016–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01271250&r=net |
| By: | Hiroki Ozono (Faculty of Law, Economics and Humanities, Kagoshima University); Yoshio Kamijo (Department of Management, Kochi University of Technology); Kazumi Shimizu (School of Political Science and Economics, Waseda University) |
| Abstract: | In this paper, we propose a new mechanism to achieve cooperation in public goods provision. The mechanism is named GEM, which stands for gradualism, endogeneity, and modification, its important properties. In a public goods game with GEM, spread over 20 periods, a target contribution is presented to the players in each period. The target is gradually increased when all members reach it. If players contribute less than the target in a certain period, the minimum contribution will be treated as the next period’s target. In the experiment, the GEM mechanism achieved a high level of cooperation when the participants’contributions were restricted to the target. However, when participants were allowed to contribute more than the target, cooperation was not achieved because of the presence of“excessive altruists”—participants who contributed more than the target.This is because excessive cooperation facilitated free riding by other members. Finally,we discuss the limitation and possibilities of the GEM mechanism. |
| Keywords: | cooperation, public goods game, altruist, experiment |
| JEL: | C72 C91 C92 M54 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:wap:wpaper:1408&r=net |
| By: | Inna Grinis |
| Abstract: | How does the change in the creditworthiness of a financial institution or sovereign impact its creditors’ solvency? I address this question in the context of the recent European sovereign debt crisis. Considering the network of Eurozone member states, interlinked through investment cross-holdings, I model default as a multi-stage disease with each credit-rating corresponding to a new infection phase, then derive systemic importance and vulnerability indicators in the presence of financial contagion, triggered by the change in the creditworthiness of a network member. I further extend the model to analyse not only negative, but also positive credit risk spillovers. |
| Keywords: | Sovereign Default; Debt Crises; Political Survival; Networks; Voter Behavior. |
| JEL: | R21 |
| Date: | 2015–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60954&r=net |
| By: | Robalino, Juan David (Cornell University) |
| Abstract: | In this paper I analyze adolescent peer effects on cigarette consumption while considering the 'popularity' of peers. The analysis is based on AddHealth data, a four wave panel survey representative of American high-school students. The data include the social network of each school, which we use to measure peers' popularity from network centrality measures, in particular weighted-eigenvector centrality. We use lagged peers' behavior at the grade level to alleviate potential homophilic confounds, and we include school fixed effects to control for contextual confounds. We find that most of the aggregate peer effects regarding cigarette smoking come from the smoking propensity of the 20% most popular kids, suggesting a mediation from social status. This effect persists seven and thirteen years later (wave 3 and 4 of the data). Indeed, the smoking propensity of the bottom 80% seems to have a negative influence on the probability of smoking in the long run (wave 3 and 4). These results hint to the importance of knowing not only the smoking propensity within a school but also the place of the smokers within the social hierarchy of the school. |
| Keywords: | peer effects, status |
| JEL: | I1 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9714&r=net |
| By: | Sundquist, Mårten; Markendahl, Jan |
| Abstract: | Despite a continued build-out of mobile networks, both mobile network coverage and capacity problems in rural areas are increasing. This counterintuitive situation is due to the exponential growth in mobile data usage, the long inter-base station site distance in rural areas and the increasing requirements on ubiquitous coverage not only for humans but also for the Internet of Things. With today’s communication systems and business models, it is not commercially viable to solve the problems by the MNOs (Mobile Network Operators) alone. The paper aims instead of studying the different regulatory strategies available for NRAs (National Regulatory Agencies) to improve the situation. The main focus and contribution of the paper is to make a cost modelling of the main regulatory solutions available to improve the coverage and capacity in rural areas. An overall cost benchmark is then made, where the relative cost for network operators, affected end-users and the public sector is displayed. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse15:127181&r=net |
| By: | Friedrich Kunz; Alexander Zerrahn |
| Abstract: | We employ a detailed two-stage model to simulate the operation of the Central Eastern European electricity market and network. Implementing different cases of coordination in congestion management between national transmission system operators, numerical results show the beneficial impact of closer cooperation. Specific steps comprise the sharing of network and dispatch information, cross-border counter-trading, and multilateral redispatch in a flow-based congestion management framework. Efficiency gains are accompanied by distributional effects. Closer economic cooperation becomes especially relevant against the background of changing spatial generation patterns, deeper international integration ofnational systems, and spillovers of national developments to adjacent systems. |
| Keywords: | Electricity, congestion management, network modeling, Europe |
| JEL: | C63 L51 L94 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1551&r=net |
| By: | Liu, Ju (CIRCLE, Lund University) |
| Abstract: | The recent wave of globalisation has been characterised not only by an increased number of cross-border production networks of multinational companies (MNCs) but also by an increasing number of their cross-border innovation networks. However, the differences, commonalities, and interaction between a MNC’s global innovation network (GIN) and global production network (GPN) have not been theoretically and empirically clarified. Using case study and social network analysis, this paper simultaneously captures the network characteristics of the case MNCs’ GINs and GPNs. It finds that the case MNCs’ GINs and GPNs 1) interact; 2) are different in terms of network composition and network centralisation; 3) are similar in terms of pattern of ties; nevertheless, 4) the interaction, the differences and the commonality clearly present firm or industrial differences. The paper argues that theoretically considering GIN and GPN as two different but interwoven layers of a MNC’s global value creation network may provide better conceptual clarity for reality interpretation and theoretical development. It suggests knowledge base perspective in future research for better understanding the dynamics of MNCs’ GINs and GPNs. |
| Keywords: | global innovation network; global production network; multinational companies; Social network analysis |
| JEL: | M16 O32 |
| Date: | 2015–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_045&r=net |
| By: | Antoci, Angelo; Delfino, Alexia; Paglieri, Fabio; Sabatini, Fabio |
| 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. |
| Keywords: | Evolutionary dynamics; self-protective behavior; social networks; dynamics of social interaction; social networking sites; social capital; Internet; well-being |
| JEL: | C61 C73 D85 O3 O33 Z13 |
| Date: | 2016–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69090&r=net |
| By: | Fabio Sabatini (University of Rome - La Sapienza); Francesco Sarracino |
| Abstract: | Does Facebook make people lonely and unhappy? Empirical studies have produced conflicting results about the effect of social network- ing sites (SNS) use on individual welfare. We use a representative sample of the Italian population to investigate how actual and virtual networks of social relationships influence subjective well-being (SWB). We find a significantly negative correlation between online networking and self-reported happiness. We address endogeneity in online net- working by exploiting technological characteristics of the pre-existing voice telecommunication infrastructures that exogenously determined the availability of broadband for high-speed Internet. We try to further disentangle the direct effect of SNS use on well-being from the indirect effect possibly caused by the impact of SNS's on trust and sociability in a SEM analysis. We find that online networking plays a positive role in SWB through its impact on physical interactions. On the other hand, SNS use is associated with lower social trust, which is in turn positively correlated with SWB. The overall effect of network- ing on individual welfare is significantly negative. |
| Keywords: | social participation; online networks; Facebook; social trust; social capital; subjective well-being; hate speech; broadband; digital divide |
| JEL: | C36 D85 O33 Z13 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp54&r=net |