nep-net New Economics Papers
on Network Economics
Issue of 2016‒11‒13
four papers chosen by
Pedro CL Souza
Pontifícia Universidade Católica do Rio de Janeiro

  1. Social networks, agricultural innovations, and farm productivity in Ethiopia By Mekonnen, Daniel Ayalew; Gerber, Nicolas; Matz, Julia Anna
  2. One-way and two-way cost allocation in hub network problems By Bergantiños, Gustavo; Vidal-Puga, Juan
  3. Peer monitoring via loss mutualization By Francesco Palazzo
  4. The Role of Social Networks Among Low-Income Fathers: Findings from the PACT Evaluation By Angela Valdovinos D'Angelo; Emily Knas; Pamela Holcomb; Kathryn Edin

  1. By: Mekonnen, Daniel Ayalew; Gerber, Nicolas; Matz, Julia Anna
    Abstract: This paper examines the existence of social learning in agriculture in Ethiopia. We use a ‘random matching within sample’ technique to collect data on social networks and elicit details of the relationships and information exchange between network members, complementing the analysis with information on self-reported networks. We find that, while kinship or membership in certain groups, informal forms of insurance, or having frequent meetings with network members are all associated with a higher probability of forming an information link, none of these are correlated with observed innovative behavior such as the adoption of row-planting. This may suggest that behavior is more likely to be affected by the nature of information that passes through the network, rather than the number of information links. In support of this, we find that information links that exclusively involve discussions on farming or business matters are indeed associated with a higher likelihood of adopting row-planting. We use econometric strategies to isolate social learning from that of correlated and contextual effects. After controlling for factors that might otherwise generate spurious correlation, we find a strong evidence of network externalities in the adoption of row-planting techniques and also in farm productivity. Our results imply that extension services and other programs that promote agricultural innovations and seek yield improvement may benefit from social networks but they may be more effective if they identify the ‘right’ networks, that is, the ones that exclusively involve information exchange regarding agriculture. This further implies that investment in group formation, rather than simply using existing networks, may be a beneficial strategy.
    Keywords: Social networks, innovations, row planting, agriculture, Ethiopia, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, Q1, D02, O33, D83, D62,
    Date: 2016–09
  2. By: Bergantiños, Gustavo; Vidal-Puga, Juan
    Abstract: We study hub problems where a set of nodes send and receive data from each other. In order to reduce costs, the nodes use a network with a given set of hubs. We address the cost sharing aspect by assuming that nodes are only interested in either sending or receiving data, but not both (one-way flow) or that nodes are interested in both sending and receiving data (two-way flow). In both cases, we study the non-emptiness of the core and the Shapley value of the corresponding cost game.
    Keywords: hub network; cost allocation; core; Shapley value
    JEL: C71
    Date: 2016–11–02
  3. By: Francesco Palazzo (Bank of Italy)
    Abstract: After the 2008 financial crisis, the allocation of losses resulting from a bank bankruptcy has been one of the main policy issues. Several new regulatory provisions increased the burden of losses endured by the rest of the financial industry. For example, bank resolution schemes and mandatory clearing through Central Counterparties (CCPs) introduce mechanisms to share losses among surviving banks, with an emphasis on ensuring a sufficient loss absorption capacity. Without understating this relevant concern, this article suggests that a loss mutualization scheme may also foster market discipline by other banks (peers) if combined with an appropriate design of the relevant metrics used to allocate losses among surviving banks. The optimal design should impose higher contributions on banks with closer interlinkages with the defaulter. In this respect, the results highlight how the allocation of losses beyond the defaulter's initial contribution plays a considerable role on peer monitoring incentives.
    Keywords: peer monitoring, default fund, resolution fund, clearinghouse, collateral
    JEL: G23 G28
    Date: 2016–10
  4. By: Angela Valdovinos D'Angelo; Emily Knas; Pamela Holcomb; Kathryn Edin
    Abstract: Findings from the qualitative study of the Parents and Children Together evaluation offer insight into the social networks of low-income fathers and the organizational supports they turn to for assistance.
    Keywords: PACT, parents and children together, social networks, low-income fathers
    JEL: I

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