nep-net New Economics Papers
on Network Economics
Issue of 2022‒05‒16
four papers chosen by
Alfonso Rosa García
Universidad de Murcia

  1. Network formation with NIMBY constraints By Lukas Block
  2. The Social Integration of International Migrants: Evidence from the Networks of Syrians in Germany By Michael Bailey; Drew M. Johnston; Martin Koenen; Theresa Kuchler; Dominic Russel; Johannes Stroebel
  3. Optimal Routing for Constant Function Market Makers By Guillermo Angeris; Tarun Chitra; Alex Evans; Stephen Boyd
  4. Coalition formation versus free riding in rent-seeking contests (title of the paper) By Lukas Block

  1. By: Lukas Block (Paderborn University)
    Abstract: We study the structure of power networks in consideration of local protests against certain power lines ('not-in-my-backyard'). An application of a network formation game is used to determine whether or not such protests arise. We examine the existence of stable networks and their characteristics, when no player wants to make an alteration. Stability within this game is only reached if each player is sufficiently connected to a power source but is not linked to more players than necessary. In addition, we introduce an algorithm that creates a stable network. (abstract of the paper)
    Keywords: Network formation, NIMBY, Power networks, Nash stability
    JEL: C71 D72 D74
    Date: 2022–04
  2. By: Michael Bailey; Drew M. Johnston; Martin Koenen; Theresa Kuchler; Dominic Russel; Johannes Stroebel
    Abstract: We use de-identified data from Facebook to study the social integration of Syrian migrants in Germany, a country that received a large influx of refugees during the Syrian Civil War. We construct measures of migrants' social integration based on Syrians' friendship links to Germans, their use of the German language, and their participation in local social groups. We find large variation in Syrians' social integration across German counties, and use a movers' research design to document that these differences are largely due to causal effects of place. Regional differences in the social integration of Syrians are shaped both by the rate at which German natives befriend other locals in general (general friendliness) and the relative rate at which they befriend local Syrian migrants versus German natives (relative friending). We follow the friending behavior of Germans that move across locations to show that both general friendliness and relative friending are more strongly affected by place-based effects such as local institutions than by persistent individual characteristics of natives (e.g., attitudes toward neighbors or migrants). Relative friending is higher in areas with lower unemployment and more completed government-sponsored integration courses. Using variation in teacher availability as an instrument, we find that integration courses had a substantial causal effect on the social integration of Syrian migrants. We also use fluctuations in the presence of Syrian migrants across high school cohorts to show that natives with quasi-random exposure to Syrians in school are more likely to befriend other Syrian migrants in other settings, suggesting that contact between groups can shape subsequent attitudes towards migrants.
    JEL: D85 F22 J15 K37
    Date: 2022–04
  3. By: Guillermo Angeris; Tarun Chitra; Alex Evans; Stephen Boyd
    Abstract: We consider the problem of optimally executing an order involving multiple crypto-assets, sometimes called tokens, on a network of multiple constant function market makers (CFMMs). When we ignore the fixed cost associated with executing an order on a CFMM, this optimal routing problem can be cast as a convex optimization problem, which is computationally tractable. When we include the fixed costs, the optimal routing problem is a mixed-integer convex problem, which can be solved using (sometimes slow) global optimization methods, or approximately solved using various heuristics based on convex optimization. The optimal routing problem includes as a special case the problem of identifying an arbitrage present in a network of CFMMs, or certifying that none exists.
    Date: 2022–04
  4. By: Lukas Block (Paderborn University)
    Abstract: We study lobby group formation in a two-stage model where the players first form lobby groups that then engage in a rent-seeking contest to influence the legislator. However, the outcome of the contest affects all players according to the ideological distance between the implemented policy and the players' preferences. The players can either lobby by themselves, form a coalition of lobbyists or free ride. We find that free coalition formation is reasonable if either players with moderate preferences face lobby groups with extreme preferences, or if there are two opposing coalitions with an equal number of members. Otherwise, there are always free riders among the players. (abstract of the paper)
    Keywords: Group formation, Rent-seeking, Free riding
    JEL: C71 D72 D74
    Date: 2022–04

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