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on Network Economics |
| By: | Laurent, Thibault; Panova, Elena |
| Abstract: | Various social networks share prominent features: clustering, rightskewed degree distribution, segregation into densely connected com- munities. We build network formation game rationalizing these features with signal-extraction benet by network participants. The players build network to exchange their private signals on the relevant state. We show that a family of Nash equilibrium networks possesses the above-mentioned prominent features of real networks. We show, furthermore, that networks with these features are e¢ cient. |
| Keywords: | network formation, endogenous information benet, clustering, hubs, differentiated priors, Bayesian learning in networks. |
| JEL: | D82 D85 C72 |
| Date: | 2020–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:124728&r=all |
| By: | Maria Tsouri; ; |
| Abstract: | The proximity literature usually treats proximity in terms of common attributes shared by agents, disregarding the relative position of an actor inside the network. This paper discusses the importance of such dimension of proximity, labelled as in-network proximity, and proposes an empirical measurement for it, assessing its impact (jointly with other dimensions of proximity) on the creation of strong knowledge network ties in ICT in the region of Trentino. The findings show that actors with higher in-network proximity are more attractive for both other central actors and peripheral ones, which is further strengthening their position within the network. |
| Keywords: | knowledge networks, in-network proximity, strong ties, proximity dimensions |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2045&r=all |
| By: | Harold M. Hastings; Tai Young-Taft; Chih-Jui Tsen |
| Abstract: | In a seminal 1972 paper, Robert M. May asked: "Will a Large Complex System Be Stable?" and argued that stability (of a broad class of random linear systems) decreases with increasing complexity, sparking a revolution in our understanding of ecosystem dynamics. Twenty-five years later, May, Levin, and Sugihara translated our understanding of the dynamics of ecological networks to the financial world in a second seminal paper, "Complex Systems: Ecology for Bankers." Just a year later, the US subprime crisis led to a near worldwide "great recession," spread by the world financial network. In the present paper we describe highlights in the development of our present understanding of stability and complexity in network systems, in order to better understand the role of networks in both stabilizing and destabilizing economic systems. A brief version of this working paper, focused on the underlying theory, appeared as an invited feature article in the February 2020 Society for Chaos Theory in Psychology and the Life Sciences newsletter (Hastings et al. 2020). |
| Keywords: | Stability; Complexity; May-Wigner; Noise; Subprime Crisis; Liquidity Shock |
| JEL: | C02 C62 E17 H12 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_971&r=all |
| By: | Matteo Tubiana (University of Bergamo); Ernest Miguelez (GREThA UMR CNRS 5113 - Université de Bordeaux); Rosina Moreno (AQR-IREA Research Group, University of Barcelona. Department of Econometrics, Statistics and Applied Economics. Av. Diagonal 690, 08034 Barcelona, Spain) |
| Abstract: | Innovation rarely happens through the actions of a single person. Innovators source their ideas while interacting with their peers, at different levels and with different intensities. In this paper, we exploit a dataset of disambiguated inventors in European cities to assess the influence of their interactions with co-workers, organizations’ colleagues, and geographically co-located peers, to understand if the different levels of interaction influence their productivity. Following inventors’ productivity over time and adding a large number of fixed effects to control for unobserved heterogeneity, we uncover critical facts, such as the importance of city knowledge stocks for inventors’ productivity, with firm knowledge stocks and network knowledge stocks being of smaller importance. However, when the complexity and quality of knowledge is accounted for, the picture changes upside down and closer interactions (individuals’ co-workers and firms’ colleagues) become way more important. |
| Keywords: | Inventors, Productivity, Stock of knowledge, Interactions. JEL classification: O18, O31, O33, O52, R12. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:202013&r=all |
| By: | Elisa Hofmann (International Max Planck Research School "Adapting Behavior in a Fundamentally Uncertain World", Friedrich Schiller University Jena) |
| Abstract: | Individual decision-making in Pay-What-You-Want settings is prone to social influence. Es pecially payment observability and the social relationship with other buyers during the payment decision are two important components of social influence. In practical applications of Pay-What-You-Want both phenomena often occur together while not being investigated yet for more than two types of social relationships. Thus, it is not clear how the presence of various types of social relationships influence voluntary payments and how they relate to payment observability. This study examines both drivers of social influence and investigates how payment observability (audience effect) and different types of social relationships (closeness effect) affect voluntary payments at the American Museum of Natural History. 1034 subjects participated in the study. I find that both, payment observability and interpersonal closeness, significantly increase payments. Voluntary payments are significantly higher if observed by other buyers and if visitors are surrounded by interpersonally close others. A high level of consistency between beliefs and behavior with increasing interpersonal closeness is discussed as potential explanation of the closeness effect. The study results are robustly confirmed in a replication study with 995 subjects. |
| Keywords: | social influence, interpersonal closeness, social image concerns, experiments, Pay-What-You-Want |
| JEL: | C90 D01 D91 L11 |
| Date: | 2020–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-016&r=all |
| By: | Rogelio V. Mercado Jr.; Shanty Noviantie (South East Asian Central Banks (SEACEN) Research and Training Centre) |
| Abstract: | This paper uses a dataset on bilateral capital flows to construct a financial centrality measure for 64 advanced and emerging economies from 2000-16 to capture an economy’s importance within the global financial flows network. The results highlight the varying significance of network systemic and idiosyncratic factors in explaining financial centrality across different types of investments and residency of investors. Most notably, the findings show that financial centres have deeper and more developed financial system, implying their importance in global financial intermediation. |
| Keywords: | Financial Centrality, Financial Depth, Network Analysis |
| JEL: | D85 F21 F36 G15 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:sea:wpaper:wp38&r=all |