nep-net New Economics Papers
on Network Economics
Issue of 2017‒01‒29
five papers chosen by
Pedro CL Souza
Pontifícia Universidade Católica do Rio de Janeiro

  1. The Internet as Quantitative Social Science Platform: Insights from a Trillion Observations By Klaus Ackermann; Simon D Angus; Paul A Raschky
  2. Gender Peer Effects Heterogeneity in Obesity By Rokhaya Dieye; Bernard Fortin
  3. Contagion in the CDS Market By H Peyton Young; Mark Paddrik
  4. Identifying contagion in a banking network By Morrison, Alan; Vasios, Michalis; Wilson, Mungo; Zikes, Filip
  5. Inspiration From The “Biggest Loser†: Social Interactions In A Weight Loss Program By Kosuke Uetake; Nathan Yang

  1. By: Klaus Ackermann; Simon D Angus; Paul A Raschky
    Abstract: With the large-scale penetration of the internet, for the first time, humanity has become linked by a single, open, communications platform. Harnessing this fact, we report insights arising from a unified internet activity and location dataset of an unparalleled scope and accuracy drawn from over a trillion (1.5$\times 10^{12}$) observations of end-user internet connections, with temporal resolution of just 15min over 2006-2012. We first apply this dataset to the expansion of the internet itself over 1,647 urban agglomerations globally. We find that unique IP per capita counts reach saturation at approximately one IP per three people, and take, on average, 16.1 years to achieve; eclipsing the estimated 100- and 60- year saturation times for steam-power and electrification respectively. Next, we use intra-diurnal internet activity features to up-scale traditional over-night sleep observations, producing the first global estimate of over-night sleep duration in 645 cities over 7 years. We find statistically significant variation between continental, national and regional sleep durations including some evidence of global sleep duration convergence. Finally, we estimate the relationship between internet concentration and economic outcomes in 411 OECD regions and find that the internet's expansion is associated with negative or positive productivity gains, depending strongly on sectoral considerations. To our knowledge, our study is the first of its kind to use online/offline activity of the entire internet to infer social science insights, demonstrating the unparalleled potential of the internet as a social data-science platform.
    Date: 2017–01
  2. By: Rokhaya Dieye; Bernard Fortin
    Abstract: This paper explores gender peer effects heterogeneity in adolescent Body Mass Index (BMI). We propose a utility-based non-cooperative social network model with effort technology. We allow the gender composition to influence peer effects. We analyze the possibility of recovering the fundamentals of our structural model from the best-response functions. We provide identification conditions of these functions generalizing those of the homogeneous version of the model. Extending Liu and Lee [2010], we consider 2SLS and GMM strategies to estimate our model using Add Health data. We provide tests of homophily in the formation of network and reject them after controlling for network (school) fixed effects. The joint (endogenous plus contextual) gender homogeneous model is rejected. However, we do not reject that the endogenous effects are the same.This suggests that the source of gender peer effects heterogeneity is the contextual effects. We find that peers’ age, parents’ education, health status, and race are relevant for the latter effects and are gender-dependent.
    Keywords: Obesity, Social Networks, Gender, Heterogeneity, Peer Effects, Identification, Add Health.
    JEL: L12 C31 Z13 D85
    Date: 2017
  3. By: H Peyton Young; Mark Paddrik
    Abstract: Abstract This paper analyzes counterparty exposures in the credit default swaps market and examines the impact of severe credit shocks on the demand for variation margin, which are the payments that counterparties make to offset price changes. We employ the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) shocks and estimate their impact on the value of CDS contracts and the variation margin owed. Large and sudden demands for variation margin may exceed a firm's ability to pay, leading some firms to delay or forego payments. These shortfalls can become amplified through the network of exposures. Of particular importance in cleared markets is the potential impact on the central counterparty clearing house. Although a central node according to conventional measures of network centrality, the CCP contributes less to contagion than do several peripheral firms that are large net sellers of CDS protection. During a credit shock these firms can suffer large shortfalls that lead to further shortfalls for their counterparties, amplifying the initial shock.
    Keywords: Credit default swaps, stress testing, systemic risk, financial networks
    JEL: D85 G01 G17 L14
    Date: 2017–01–24
  4. By: Morrison, Alan (Said Business School, Oxford University); Vasios, Michalis (Bank of England); Wilson, Mungo (Said Business School, Oxford University); Zikes, Filip (Federal Reserve Board)
    Abstract: This paper studies the impact of trading profits and losses on bank counterparty borrowing costs using data from a derivatives trade depositary. We use the network of credit default swap (CDS) transactions between banks to identify bank CDS returns attributable to counterparty losses. Any bank’s exposure to corporate default increases whenever counterparties from whom it has purchased default protection themselves experience losses. In line with this statement, we document an increase in the own CDS spread of such a bank. We find no such effect from losses of non-counterparties, nor from counterparties who have bought protection from, rather than sold protection to, the bank. We also find that the effect on bank CDS returns through this counterparty loss channel is large relative to the direct effect on a bank’s CDS returns from its own trading losses.
    Keywords: Contagion; counterparty risk; credit default swaps; networks
    JEL: G21 G28
    Date: 2017–01–20
  5. By: Kosuke Uetake; Nathan Yang
    Abstract: We investigate the role of heterogeneous peer effects in encouraging healthy and sustainable lifestyles. Our analysis revolves around one of the largest and most extensive databases about weight loss, which contains well over 10 million observations that track individual participants’ meeting attendance and progress in a large national weight loss program. A few key findings emerge. First, while higher weight loss among average performing peers leads to lower future weight loss for an individual, the effect of the top weight loss performer among peers leads to greater future weight loss for that same individual. Second, the discouraging effects from average peers and encouraging effects from top performing peers are magnified for individuals who struggled with weight loss in the past. Third, the encouraging effect of top performers has a long-run impact on an individual’s weight loss success. Finally, we provide suggestive evidence that the discrepancy between the top and average performer effects is not likely an artifact of salience or informativeness of top performers, but instead, driven by its positive impact on the motivation to accomplish weight loss goals. Given our empirical findings, we discuss managerial implications on meeting design.
    Keywords: big data, customer development, customer relationship management, healthy and sustainable living, subscription services, weight management
    Date: 2017–01

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