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on Network Economics |
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Issue of 2017‒08‒20
four papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | Nosal, K.; |
| Abstract: | Many health insurance plans in the U.S. restrict enrollees to choose from a set of providers the insurer has contracted with. These provider networks are formed via bilateral bargaining between insurers and providers. Provider networks are an important tool for product differentiation and cost containment for insurers and also put real restrictions on consumers’ choice of providers. In this paper, I analyze matching between insurers offering Medicare Advantage Plans and physicians, using a unique data set consisting of all insurer-physician links in several counties. I estimate parameters of a two-sided, many-to-many matching model which describes formation of provider networks, using the Maximum Score estimator of Fox (2010). This method uses implications of a pairwise stability condition to estimate a joint surplus function which depends on insurer-physician links. The surplus function accounts for the role of physician and insurer characteristics in determining their match values, and also for interactions between physicians linked to the same insurer, whose services may be complements or substitutes. The results indicate that insurers prefer on the margin to link with physicians who increase the specialty concentration of their network and who are located near other physicians in the network. Physicians are negatively affected by having a broader referral network,as defined by having a larger set of physicians with whom they have insurer links in common. Finally, compared with regional insurers, nationally active insurers benefit more from matching with physicians with U.S. medical degree. Preliminary counterfactual analyses suggest that insurers and physicians would be collectively better off if all physicians were matched to all insurers– that is, if selective contracting were eliminated entirely. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:17/19&r=net |
| By: | Alan Morrison; Michalis Vasios; Mungo Wilson; Filip Zikes |
| Abstract: | We present the first micro-level evidence of the transmission of shocks through financial networks. Using the network of credit default swap (CDS) transactions between banks, we identify bank CDS returns attributable to counterparty losses. A bank's own CDS spread increases whenever counterparties from whom it has purchased default protection themselves experience losses. We find no such effect from losses of non-counterparties, nor from counterparties to whom the bank has sold protection. 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 G23 L14 |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2017-82&r=net |
| By: | Itkonen, Juha |
| Abstract: | We model a network of linked permit markets to examine efficiency and dependencies between the markets in a competitive equilibrium. Links enable the participants of one emissions trading system to use the permits of another system. To improve the cost-efficiency of the international policy architecture, the Paris climate agreement set out a framework for linking local policies. International trade in permits reduces costs by merging markets, but in a large network it is generally not obvious which markets end up linked in the equilibrium. Also, indirect links might allow foreign regulators to undermine domestic policy outcomes. We apply graph theory to study dependencies between markets and to determine how the network is partitioned into separate market areas. Our main theorem characterizes the dependency structure of the equilibrium in an exogenous trading network. We show that markets merge when they are connected by a particular pattern of links. The results help to identify potential sources of both cost reductions and foreign interference, and to secure the efficiency of climate change policies. |
| JEL: | L14 F13 Q54 Q58 D41 |
| Date: | 2017–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2017_020&r=net |
| By: | Paolo Zeppini; Evangelos Evangelou; Emanuele Pugliese; Lorenzo Napolitano; Graham Room |
| Abstract: | We search an autocatalytic structure in networks of technological fields and evaluate its significance for technological change. To this aim we define a technology network based on the International Patents Classification, and we study if autocatalytic structures in the network foster innovation as measured by the rate of production of patents. The network is identified through patenting activity of geographical regions in different technology fields. Through our analysis we show how the technological landscape of the patents database evolves as a self-organising autocatalytic structure that grows in size, and arrives to cover the most part of the technology network. Technology classes in the core of the autocatalytic structure perform better in terms of their innovativeness, as measured by the rate of growth of the number of patents. Finally, the links between classes that define the autocatalytic structure of the technology network break the hierarchical structure of the database, and indicate that recombinant innovation and its autocatalytic patterns are an important stylised fact of technological change. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1708.03511&r=net |