nep-net New Economics Papers
on Network Economics
Issue of 2020‒01‒20
eleven papers chosen by
Alfonso Rosa García
Universidad de Murcia

  1. Cooperation in an Uncertain and Dynamic World By Gallo, Edoardo; Riyanto, Yohanes E.; Roy, Nilanjan; Teh, Tat-How
  2. Street Network Models and Measures for Every U.S. City, County, Urbanized Area, Census Tract, and Zillow-Defined Neighborhood By Boeing, Geoff
  3. It is about timing: Network prestige in asynchronous online discussions By Chen, Bodong; Huang, Tianhui
  4. The Morphology and Circuity of Walkable and Drivable Street Networks By Boeing, Geoff
  5. Fixed-effect regressions on network data By Koen Jochmans; Martin Weidner
  6. Yes, The Medium Matters: How Facebook and Twitter boost Populism in Europe By Piergiuseppe Fortunato; Marco Pecoraro
  7. Systematic Banking Crises: The Relationship Between Concentration and Interbank Connections. By Andrea Calef
  8. Local ambassadors promote mobile banking in Northern Peru By Marcos Agurto; Habiba Djebbari; Sudipta Sarangi; Brenda Silupu; Carolina Trivelli; Javier Torres
  9. Networks, Start-up Capital and Women’s Entrepreneurial Performance in Africa: Evidence from Eswatini By Brixiová, Zuzana; Kangoye, Thierry
  10. Social Connectivity, Media Bias, and Correlation Neglect By Denter, Philipp; Dumav, Martin; Ginzburg, Boris
  11. Merger Policy in Digital Markets: An Ex-Post Assessment By Elena Argentesi; Paolo Buccirossi; Emilio Calvano; Tomaso Duso; Alessia Marrazzo; Salvatore Nava

  1. By: Gallo, Edoardo; Riyanto, Yohanes E.; Roy, Nilanjan; Teh, Tat-How
    Abstract: We investigate how reputational uncertainty and the rate of change of the social environment interact to influence cooperation in social networks. Reputational uncertainty significantly decreases cooperation and welfare, induces more forgiveness toward defectors, and promotes opportunistic play. Compared to reputational uncertainty, a fast-changing social environment only causes a second-order qualitative increase in cooperation by making individuals more lenient in imposing a network-punishment (link removal). The interaction between reputational uncertainty and a fast-changing social environment induces more lenient strategies by reducing the frequency of action-punishment (retaliatory defection). Although neither of them affects the aggregate network metrics, their interaction decreases homophily among cooperators.
    Keywords: Cooperation, experiments, prisoner's dilemma, uncertainty, repeated games, networks
    JEL: C72 C73 C92 D8
    Date: 2019–12–30
  2. By: Boeing, Geoff (Northeastern University)
    Abstract: OpenStreetMap provides a valuable crowd-sourced database of raw geospatial data for constructing models of urban street networks for scientific analysis. This paper reports results from a research project that collected raw street network data from OpenStreetMap using the Python-based OSMnx software for every U.S. city and town, county, urbanized area, census tract, and Zillow-defined neighborhood. It constructed nonplanar directed multigraphs for each and analyzed their structural and morphological characteristics. The resulting data repository contains over 110,000 processed, cleaned street network graphs (which in turn comprise over 55 million nodes and over 137 million edges) at various scales—comprehensively covering the entire U.S.—archived as reusable open-source GraphML files, node/edge lists, and GIS shapefiles that can be immediately loaded and analyzed in standard tools such as ArcGIS, QGIS, NetworkX, graph-tool, igraph, or Gephi. The repository also contains measures of each network’s metric and topological characteristics common in urban design, transportation planning, civil engineering, and network science. No other such dataset exists. These data offer researchers and practitioners a new ability to quickly and easily conduct graph-theoretic circulation network analysis anywhere in the U.S. using standard, free, open-source tools.
    Date: 2019–03–01
  3. By: Chen, Bodong (University of Minnesota); Huang, Tianhui
    Abstract: Asynchronous online discussions are broadly used to support social learning. This paper reports on an undergraduate class’s online discussion activities over one semester. Applying Social Network Analysis, this study revealed a participation gap among students reflected by their varied levels of network prestige. The low-prestige group initiated equivalent volumes of interactions but were less reciprocated. In-depth analysis found the high-prestige group also advantageous in other network measures such as closeness centrality and eigenvector centrality, as well as the strength, persistence, and reciprocity of their ties. To probe potential explanations of the revealed gap, we further contrasted post content and posting behaviors between two groups. Results did not identify any significant differences in post content but found low-prestige students’ participation less timely and more temporally compressed. This paper calls for attention to the participation gap in online discussions, micro-level temporal patterns of student activities, and practical means to scaffold student participation in asynchronous online discussions.
    Date: 2019–03–18
  4. By: Boeing, Geoff (Northeastern University)
    Abstract: Circuity, the ratio of network distances to straight-line distances, is an important measure of urban street network structure and transportation efficiency. Circuity results from a circulation network's configuration, planning, and underlying terrain. In turn, it impacts how humans use urban space for settlement and travel. Although past research has examined overall street network circuity, researchers have not studied the relative circuity of walkable versus drivable circulation networks. This study uses OpenStreetMap data to explore relative network circuity. We download walkable and drivable networks for 40 US cities using the OSMnx software, which we then use to simulate four million routes and analyze circuity to characterize network structure. We find that walking networks tend to allow for more direct routes than driving networks do in most cities: average driving circuity exceeds average walking circuity in all but four of the cities that exhibit statistically significant differences between network types. We discuss various reasons for this phenomenon, illustrated with case studies. Network circuity also varies substantially between different types of places. These findings underscore the value of using network-based distances and times rather than straight-line when studying urban travel and access. They also suggest the importance of differentiating between walkable and drivable circulation networks when modeling and characterizing urban street networks: although different modes' networks overlap in any given city, their relative structure and performance vary in most cities.
    Date: 2019–01–28
  5. By: Koen Jochmans (Institute for Fiscal Studies and University of Cambridge); Martin Weidner (Institute for Fiscal Studies and cemmap and UCL)
    Abstract: This paper considers inference on fixed effects in a linear regression model estimated from network data. An important special case of our setup is the two-way regression model. This is a workhorse technique in the analysis of matched data sets, such as employer-employee or student-teacher panel data. We formalize how the structure of the network affects the accuracy with which the fixed effects can be estimated. This allows us to derive sufficient conditions on the network for consistent estimation and asymptotically-valid inference to be possible. Estimation of moments is also considered. We allow for general networks and our setup covers both the dense and sparse case. We provide numerical results for the estimation of teacher value-added models and regressions with occupational dummies.
    Date: 2019–04–03
  6. By: Piergiuseppe Fortunato; Marco Pecoraro
    Abstract: This paper examines how socio-economic characteristics, changes in the technology of political communication and their interactions affect the sentiments of the electorate and favor the spread of populist ideas in Europe. Using both European-wide and national surveys we find a significant association between exposure to online political activity and diffusion of populist ideas such as Euroscepticism only among less educated and economically vulnerable individuals. We also show that it is not the use of the internet per se that matters but the specific use of social networks for political activity.
    Keywords: Populism, Euroscepticism, Internet, Social Networks, Education
    JEL: D72 N34 L82 L86 Z13
    Date: 2020–01
  7. By: Andrea Calef (University of East Anglia)
    Abstract: In this paper I study the extent to which the nexus between concentration and interbank linkages affects financial stability, using data for a sample of 19,689 banks in 69 countries from 1995 to 2014. I find that high levels of interbank exposures decrease the probability of observing a systemic banking crisis, when the banking system is either highly concentrated or fragmented. The relationship between concentration and stability is found to be non-monotonic, as predicted by Martinez-Miera & Repullo (2010), although not U-shaped.
    Keywords: banking crisis, systemic risk, market structure; interbank linkages, network, contagion.
    JEL: G01 G21 G28
    Date: 2020–01–15
  8. By: Marcos Agurto (Universidad de Piura); Habiba Djebbari (Aix-Mareseille Universite); Sudipta Sarangi (Virginia Tech); Brenda Silupu (Universidad de Piura); Carolina Trivelli (Instituto de Estudios Peruanos); Javier Torres (Universidad del Pacifico)
    Abstract: We experiment with a novel way to boost information acquisition that exploits existing social ties between the promoter of a new financial technology and community members. We offer information and training workshops on a new mobile-money platform in periurban and rural areas in Peru. In the treatment group, workshops are led by promoters who are personally known to the invited participants. In the control group, comparable individuals are invited to attend similar workshops, but the workshops are led by agents external to the community. Our findings suggest that lack of information impedes product adoption, which is itself limited by lack of trust in the individual who provides the information.
    Keywords: Financial inclusion, social networks, information transmission, trust
    JEL: D91 G23 I22 I31 O33
    Date: 2020–01
  9. By: Brixiová, Zuzana; Kangoye, Thierry
    Abstract: This paper analyzes the role of networks in the access of female entrepreneurs to start-up capital and firm performance in Eswatini, a country with one of the highest female unemployment rates in Africa. The paper first shows that higher initial capital is associated with better sales performance for both men and women entrepreneurs. Women entrepreneurs start their firms with smaller start-up capital than men and are more likely to fund it from their own sources, which reduces the size of their firm and sales level. However, women with higher education start their firms with more capital than their less educated counterparts. Moreover, women who receive support from professional networks have higher initial capital, while those trained in financial literacy more often access external funding sources, including through their networks.
    Keywords: networks,start-up capital,women’s entrepreneurship,multivariate analysis,Africa
    JEL: L53 O12
    Date: 2019
  10. By: Denter, Philipp; Dumav, Martin; Ginzburg, Boris
    Abstract: We propose a model of political persuasion in which a biased newspaper aims to convince voters to vote for the government. Each voter receives the newspaper's report, as well as an independent private signal. Voters then exchange this information on social media and form posterior beliefs, neglecting correlation among signals. An increase in connectivity increases the newspaper's bias if voters are ex ante predisposed to vote against the government, and reduces the bias if they are predisposed in favour of the government. While more precise independent signals reduce the newspaper's optimal bias, the bias remains positive even when connectivity becomes large. Thus, even with a large number of social connections, the election produces an inefficient outcome with positive probability, implying a failure of the Condorcet jury theorem.
    Keywords: social media; media bias; correlation neglect; Bayesian persuasion; voting; deliberation
    JEL: D72 D83 P16
    Date: 2019–12–13
  11. By: Elena Argentesi; Paolo Buccirossi; Emilio Calvano; Tomaso Duso; Alessia Marrazzo; Salvatore Nava
    Abstract: This paper presents a broad retrospective evaluation of mergers and merger decisions in the digital sector. We first discuss the most crucial features of digital markets such as network effects, multi-sidedness, big data, and rapid innovation that create important challenges for competition policy. We show that these features have been key determinants of the theories of harm in major merger cases in the past few years. We then analyse the characteristics of almost 300 acquisitions carried out by three major digital companies –Amazon, Facebook, and Google –between 2008 and 2018. We cluster target companies on their area of economic activity and show that they span a wide range of economic sectors. In most cases, their products and services appear to be complementary to those supplied by the acquirers. Moreover, target companies seem to be particularly young, being four-years-old or younger in nearly 60% of cases at the time of the acquisition. Finally, we examine two important merger cases, Facebook/Instagram and Google/Waze, providing a systematic assessment of the theories of harm considered by the UK competition authorities as well as evidence on the evolution of the market after the transactions were approved. We discuss whether the CAs performed complete and careful analyses to foresee the competitive consequences of the investigated mergers and whether a more effective merger control regime can be achieved within the current legal framework.
    Keywords: digital markets, mergers, network effects, big data, platforms, ex-post, antitrust
    JEL: L40 K21
    Date: 2019

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