nep-net New Economics Papers
on Network Economics
Issue of 2023‒01‒23
seven papers chosen by
Alfonso Rosa García
Universidad de Murcia

  1. Homophily and Transmission of Behavioral Traits in Social Networks By Bhargava, Palaash; Chen, Daniel L.; Sutter, Matthias; Terrier, Camille
  2. Waiting for My Neighbors By Sidartha Gordon; Emeric Henry; Pauli Murto
  3. Heroes and Villains: The Effects of Heroism on Autocratic Values and Nazi Collaboration in France By Julia Cagé; Anna Dagorret; Pauline Grosjean; Saumitra Jha
  4. Social Media and Newsroom Production Decisions By Julia Cagé; Nicolas Hervé; Béatrice Mazoyer
  5. Synchronization of endogenous business cycles By Marco Pangallo
  6. Strategic energy flows in input-output relations: a temporal multilayer approach By Gian Paolo Clemente; Alessandra Cornaro; Rosanna Grassi; Giorgio Rizzini
  7. Urban Transit Infrastructure: Spatial Mismatch and Labor Market Power By Pérez, Jorge; Vial, Felipe; Zárate, Román

  1. By: Bhargava, Palaash (Columbia University); Chen, Daniel L. (Toulouse School of Economics); Sutter, Matthias (Max Planck Institute for Research on Collective Goods); Terrier, Camille (University of Lausanne)
    Abstract: Social networks are a key factor of success in life, but they are also strongly segmented on gender, ethnicity, and other demographic characteristics (Jackson, 2010). We present novel evidence on an understudied source of homophily, namely behavioral traits. Behavioral traits are important determinants of life-time outcomes. While recent work has focused on how these traits are influenced by the family environment or how they can be affected by childhood interventions, little is still known about how these traits are associated to social networks. Based on unique data that we collected using incentivized experiments on more than 2, 500 French high-school students, we find high levels of homophily across all ten behavioral traits that we study (including social, risk, competitive preferences, and aspirations). Notably, the extent of homophily depends on similarities in demographic characteristics, in particular with respect to gender. Furthermore, the larger the number of behavioral traits that students share, the higher the overall homophily. Then, using network econometrics, we show that the observed homophily is not only an outcome of endogenous network formation, but is also a result of friends influencing each others' behavioral traits. Importantly, the transmission of traits is larger when students share demographic characteristics, such as gender, have been friends for longer or are friends with more popular individuals.
    Keywords: homophily, social networks, behavioral traits, peer effects, experiments
    JEL: D85 C91 D01 D90
    Date: 2022–12
  2. By: Sidartha Gordon (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres); Emeric Henry (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Pauli Murto (Aalto University)
    Abstract: We introduce a neighborhood structure in a waiting game, where the payoff of stopping increases when neighbors stop. We show that the dynamic evolution of the network can take the form of either a shrinking network, where players at the edges stop first, or a fragmenting network where interior players do. In addition to the coordination inefficiency standard in waiting games, the neighborhood structure gives rise to an additional inefficiency linked to the order in which players stop. We discuss an application to technology adoption in networks.
    Keywords: Waiting games, Networks, Inefficiencies
    Date: 2021–06–10
  3. By: Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Anna Dagorret (Stanford Graduate School of Business [Stanford]); Pauline Grosjean (UNSW - University of New South Wales [Sydney]); Saumitra Jha (Stanford Graduate School of Business [Stanford])
    Abstract: We measure the effects of a network of heroes in legitimizing and diffusing extreme political behaviors. Exploiting newly-declassified intelligence files, novel voting data and regimental histories, we show the home municipalities of French line regiments arbitrarily rotated through Philippe Pétain's command during the heroic WWI battle of Verdun, though similar before WWI, increasingly espouse Pétain's authoritarian political views thereafter, raising 7% more active Nazi collaborators per capita during the Pétain-led Vichy regime (1940-44). The effects are similar across joining Fascist parties, German forces, paramilitaries hunting Jews and the Resistance, and collaborating economically.
    Keywords: Heroes, Networks, Leaders, Democratic Values, Autocracy, Identity, Votes, Legitimacy
    Date: 2022
  4. By: Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Nicolas Hervé (INA - Institut National de l'Audiovisuel); Béatrice Mazoyer (médialab - médialab (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: Social media affects not only the way we consume news, but also the way news is produced, including by traditional media outlets. In this paper, we study the propagation of information from social media to mainstream media, and investigate whether news editors' editorial decisions are influenced by the popularity of news stories on social media To do so, we build a novel dataset including a representative sample of all the tweets produced in French between August 1st 2018 and July 31st 2019 (1.8 billion tweets, around 70% of all tweets in French) and the content published online by 200 mainstream media outlets. We then develop novel algorithms to identify and link events on social and mainstream media. To isolate the causal impact of popularity, we rely on the structure of the Twitter network and propose a new instrument based on the interaction between measures of user centrality and "social media news pressure" at the time of the event. We show that story popularity has a positive effect on media coverage, and that this effect varies depending on the media outlets' characteristics, in particular on whether they use a paywall. Finally, we investigate consumers' reaction to a surge in social media popularity. Our findings shed new light on our understanding of how editors decide on the coverage for stories, and question the welfare effects of social media.
    Keywords: Internet, Information spreading, News editors, Network analysis, Social media, Twitter, Text analysis
    Date: 2022–05–31
  5. By: Marco Pangallo
    Abstract: Business cycles tend to comove across countries. However, standard models that attribute comovement to propagation of exogenous shocks struggle to generate a level of co-movement that is as high as in the data. In this paper, we consider models that produce business cycles endogenously, through some form of non-linear dynamicsâ۠limit cycles or chaos. These models generate stronger comovement, because they combine shock propagation with synchronization of endogenous dynamics. In particular, we study a demand-driven model in which business cycles emerge from strategic complementarities within countries, synchronizing their oscillations through international trade linkages. We develop an eigen-decomposition that explores the interplay between non-linear dynamics, shock propagation and network structure, and use this theory to understand the mechanisms of synchronization. Next, we calibrate the model to data on 24 countries and show that the empirical level of comovement can only be matched by combining endogenous business cycles with exogenous shocks. Our results lend support to the hypothesis that business cycles are at least in part caused by underlying non-linear dynamics.
    Keywords: Synchronization; Business Cycles; Non-linear dynamics; Networks.
    Date: 2023–01–04
  6. By: Gian Paolo Clemente; Alessandra Cornaro; Rosanna Grassi; Giorgio Rizzini
    Abstract: The energy consumption, the transfer of resources through the international trade, the transition towards renewable energies and the environmental sustainability appear as key drivers in order to evaluate the resilience of the energy systems. Concerning the consumptions, in the literature a great attention has been paid to direct energy, but the production of goods and services also involves indirect energy. Hence, in this work we consider different types of embodied energy sources and the time evolution of the sectors' and countries' interactions. Flows are indeed used to construct a directed and weighted temporal multilayer network based respectively on renewable and non-renewable sources, where sectors are nodes and layers are countries. We provide a methodological approach for analysing the network reliability and resilience and for identifying critical sectors and economies in the system by applying the Multi-Dimensional HITS algorithm. Then, we evaluate central arcs in the network at each time period by proposing a novel topological indicator based on the maximum flow problem. In this way, we provide a full view of economies, sectors and connections that play a relevant role over time in the network and whose removal could heavily affect the stability of the system. We provide a numerical analysis based on the embodied energy flows among countries and sectors in the period from 1990 to 2016. Results prove that the methods are effective in catching the different patterns between renewable and non-renewable energy sources.
    Date: 2022–12
  7. By: Pérez, Jorge; Vial, Felipe; Zárate, Román
    Abstract: Does transit infrastructure reduce labor market power? This paper estimates the effects of a large subway expansion on local labor market outcomes in Santiago, Chile. Using a linked employer-employee dataset with spatial information, we estimate the effects of the network expansion on the most-affected workers and firms through a reduced-form analysis. We find changes in work locations and wages consistent with a reduction in firms’ labor market power around areas connected to the subway network after the expansion. We then lay out a quantitative spatial equilibrium model where firms behave as oligopsonies in the labor market to calculate the welfare gains from the transit infrastructure expansion. Our model allows us to decompose the welfare gains into i) the efficiency gains through improved matching between workers and firms and ii) the gains from reducing labor misallocation through labor market power responses. The model also provides a framework to analyze the distributional implications of the infrastructure expansion. We find that workers benefit as firm owners see reduced profits and that accounting for labor market power responses amplifies the welfare gains.
    Keywords: Desarrollo urbano, Economía, Infraestructura,
    Date: 2022

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