nep-net New Economics Papers
on Network Economics
Issue of 2016‒03‒17
four papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Switching Costs in Two-sided Markets By LAM, W.
  2. Social long-term care insurance with two-sided altruism By CREMER, B.; PESTIEAU, P.; ROEDER, K.
  3. Cell Phone Security: Usage Trends and Awareness of Security Issues By Scott Mensch
  4. Descriptive analysis of the knowledge network formation in East Asia By Nabeshima, Kaoru; Kang, Byeongwoo; Kashcheeva, Mila

  1. By: LAM, W. (University of Liege)
    Abstract: In many markets, there are switching costs and network effects. Yet the literature gen- erally deals with these two concepts separately. This paper bridges the gap by analyzing their interaction effects (or “indirect bargain”) in a dynamic two-sided market. I show that in a symmetric equilibrium, the classic result that the first-period price is U-shape in switching costs does not emerge, but instead switching costs always intensify first-period price competition. Moreover, an increase in switching costs on one side decreases the first- period price on the other side. Thus policies that ignore these effects may underestimate the welfare-enhancing effects of switching costs.
    Keywords: switching costs, two-sided markets, network externality, myopia, loyalty
    JEL: D43 L13 L96
    Date: 2015–03–01
  2. By: CREMER, B. (Toulouse School of Ecoomics); PESTIEAU, P. (3CREPP, Université de Liège; CORE, Université catholique de Louvain, and Toulouse School of Ecoomics); ROEDER, K. (University of Augsburg)
    Abstract: This paper studies the design of a social long-term care (LTC) insurance when altruism is two-sided. The laissez-faire solution is not efficient, unless there is perfect altruism. Under full information, the first-best can be decentralized by a linear subsidy on informal aid, a linear tax on bequests when the parent is dependent and state specific lump-sum transfers which provide insurance. We also study a second-best scheme comprising a LTC benefit, a payroll tax on children’s earnings and an inheritance tax. This scheme redistributes resources across individuals and between the states of nature and the tax on children’s labor enhances informal care to compensate for the children’s possible less than full altruism.
    Keywords: long-term care, social insurance, two-sided altruism
    JEL: H2 H5
    Date: 2015–10–21
  3. By: Scott Mensch (Indiana University of Pennsylvania)
    Abstract: One only has to look around while they are in public places to see the increased usage of cell phones in today's society. People glued to their phones can easily be found in restaurants, waiting rooms, sporting events, movie theaters, or even while people are walking or driving a vehicle. The amount of users who are using apps on their smart phones for not only social networking purposes, but also reading e-mail, shopping online, and checking bank accounts and paying bills has drastically increased within the past three years. The act of taking these portable devices outside of the office or home has added a new element in network security. While the common users computer literacy skills have increased over the past decade, it is unknown if the rapid advancements in smart phone technology has mirrored individuals understanding of network security concerns when using cell phones. This paper servers as the foundation to begin a research study regarding cell phone security behaviors as part of a broader study examining the security practices and cell phone usage of college students. While students understand the importance of network and data security, a broader study is needed to gauge their understanding of securing their mobile devices from not only physical intrusions, but also traditional security issues such as viruses, spam, and spyware.
    Keywords: Network security, cell phone security, cell phone usage trends
  4. By: Nabeshima, Kaoru; Kang, Byeongwoo; Kashcheeva, Mila
    Abstract: This paper shows descriptively how the knowledge network in East Asia has been formed. In addition, the correlation between the knowledge network and economic growth is also examined. Evidence is provided to show that plugging into the knowledge network of developed countries could be a key for increasing innovativeness in a country.
    Keywords: Asia, Research & development, Scientific technology, Technological innovations, Technology transfer, Economic growth, Economic development, Macroeconomics, Network, Globalization, East Asia, Knowledge network, Patent data
    JEL: O11 O40 O53
    Date: 2016–03

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