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on Network Economics |
| By: | Craig, Ben; Karamysheva, Madina; Salakhova, Dilyara |
| Abstract: | We compare networks constructed using five commonly used methods and publicly available daily market data to networks based on reported exposures along several dimensions of the balance sheet, i.e., loans, bonds, equity. Our findings suggest that while the global network structure remains stable, individual exposures are more dynamic. The main message from the regression analysis is that the market-based networks do their job relatively well, however, various market-based networks capture different types of exposures. All the measures reflect common portfolios of bonds and loans. Equity-based measures match better direct and indirect equity, while credit-risk measures capture direct bonds. None of the measures robustly identify direct interbank lending. JEL Classification: G20, L14, D85, C63 |
| Keywords: | banking regulation, interconnections, market-based networks, true-exposure networks, financial networks |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20232867&r=net |
| By: | Breithaupt, Patrick; Hottenrott, Hanna; Rammer, Christian; Römer, Konstantin |
| Abstract: | The availability of social media data is growing and represents a new data source for economic research. This paper presents a detailed study on the use of data from a careeroriented social networking platform for measuring employee flows and employer networks. The employment data are exported from user profiles and linked to the Mannheim Enterprise Panel (MUP). The linked employer-employee (LEE) data consists of 14 million employments for 1.5 million employers. The platform-based LEE data is used to create annual employer networks comprised of data from 9 million employee flows. Plausibility checks confirm that career-oriented social networking data contain valuable data about employment, employee flows, and employer networks. Using such data provides opportunities for research on employee mobility, networks, and local ecosystems' role in economic performance at the employer and the regional level. |
| Keywords: | social networks, platform data, lee data, labour mobility, network analysis |
| JEL: | C81 J60 L14 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:279575&r=net |
| By: | Giorgio Fabbri (Univ.Grenoble Alpes, CNRS, INRIA, Grenoble INP, GAEL, Grenoble, France); Silvia Faggian (Department of Economics, University Of Venice Ca' Foscari, Italy); Giuseppe Freni (Department of Business and Economics, University of Naples “Parthenope†, Naples, Italy.) |
| Abstract: | This study examines the dynamics of capital stocks distributed among several nodes, representing different sites of production and connected via a weighted, directed network.The network represents the externalities or spillovers that the production in each node generates on the capital stock of other nodes. A regulator decides to designate some of the nodes for the production of a consumption good to maximise a cumulative utility from consumption. It is demonstrated how the optimal strategies and stocks depend on the productivity of the resource sites and the structure of the connections between the sites. The best locations to host production of the consumption good are identified per the model's parameters and correspond to the least central (in the sense of eigenvector centrality) nodes of a suitably redefined network that combines both flows between nodes and the nodes' productivity. |
| Keywords: | Capital allocation, Production externalities, Network spillovers, Economic centrality measures. |
| JEL: | C61 D62 O41 R12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2023:23&r=net |
| By: | Yann Algan; Nicolò Dalvit; Quoc-Anh Do; Alexis Le Chapelain; Yves Zenou |
| Abstract: | We study how social interaction and friendship shape students' political opinions in a natural experiment at Sciences Po, the cradle of top French politicians. Quasi-random assignments of students into the same short-term integration groups before their scholar curriculum reduce political opinion gap, and increase friendship formation. Using the pairwise indicator of same-group membership as instrumental variable for friendship, we find that friendship causes a reduction of differences in opinions by 40% of the standard deviation of opinion gap. The evidence is consistent with a homophily-enforced mechanism, by which friendship causes initially politically-similar students to join political associations together, which reinforces their political similarity, without exercising an effect on initially politically-dissimilar pairs. Friendship affects opinion gaps by reducing divergence, therefore polarization and extremism, without forcing individuals’ views to converge. Network characteristics also matter to the friendship effect. |
| Keywords: | political opinion, social networks, friendship effect, polarization, homophily, extremism, natural experiment |
| JEL: | C93 D72 Z13 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10753&r=net |
| By: | Gutierrez-Lythgoe, Antonio |
| Abstract: | This study aims to analyse disparities in entrepreneurship across the United States, taking into account the diverse socioeconomic contexts of each county and emphasizing the role of social capital structures and their connections to nearby regions. To conduct this research, we utilize data on Non-farm Proprietorships (NFP) as an indicator of entrepreneurial activity, sourced from the US Bureau of Economic Analysis, in conjunction with socioeconomic and demographic variables from the US Census Bureau, and social network data from Facebook via the Social Capital Atlas project. Employing spatial econometric techniques, we examine spatial dependence patterns and reveal a statistically significant and positive spatial autocorrelation. Particularly, we identify statistically significant correlations between the proportion of connections among different socioeconomic groups and entrepreneurial activity, as well as negative correlations between the Social Cohesion Index and non-farm proprietorships. These findings corroborate the significance of "weak ties" in social networks, as theorised by Granovetter, and underscore how associations with individuals of higher socioeconomic status could invigorate entrepreneurial initiatives, carrying notable practical implications for entrepreneurship promotion and policy development. |
| Keywords: | Non-farm proprietorship; Social Capital; Facebook data; Spatial Econometrics |
| JEL: | C21 L26 R11 |
| Date: | 2023–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119068&r=net |
| By: | Giorgio Fabbri (Univ.Grenoble Alpes, CNRS, INRIA, Grenoble INP, GAEL, Grenoble, France); Silvia Faggian (Department of Economics, University Of Venice Ca' Foscari, Italy); Giuseppe Freni (Department of Business and Economics, University of Naples "Parthenope", Naples, Italy.) |
| Abstract: | We study the dynamics of the exploitation of a natural resource distributed among and flowing between several nodes connected via a weighted, directed network. The network represents both the locations and the interactions of the resource nodes. A regulator decides to designate some of the nodes as natural reserves where no exploitation is allowed. The remaining nodes are assigned (one-to-one) to players, who will exploit the resource at the node. We show how the equilibrium exploitation and the resource stocks depend on the productivity of the resource sites, on the structure of the connections between the sites, and on the number and the preferences of the agents. The best locations to host nature reserves are identified according to the model's parameters, and we find that they correspond to the most central (in the sense of eigenvector centrality) nodes of a suitably redefined network that considers the nodes' productivity. |
| Keywords: | Harvesting, spatial models, differential games, nature reserve |
| JEL: | Q28 C72 Q23 C61 R12 Q20 R11 C73 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2022:03&r=net |
| By: | Gene M. Grossman (Princeton University); Elhanan Helpman (Harvard University); Alejandro Sabal (Princeton University) |
| Abstract: | Forward-looking investments determine the resilience of firms' supply chains. Such investments confer externalities on other firms in the production network. We compare the equilibrium and optimal allocations in a general equilibrium model with an arbitrary number of vertical production tiers. Our model features endogenous investments in resilience, endogenous formation of supply links, and sequential bargaining over quantities and payments between firms in successive tiers. We derive policies that implement the first-best allocation, allowing for subsidies to input purchases, network formation, and investments in resilience. The first-best policies depend only on production function parameters of the pertinent tier. When subsidies to transactions are infeasible, the second-best subsidies for resilience and network formation depend on production function parameters throughout the network, and subsidies are larger upstream than downstream whenever the bargaining weights of buyers are non-increasing along the chain. |
| Keywords: | Firms, Resilience, Vertical Supply Chains |
| JEL: | D21 D62 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2023-03&r=net |
| By: | Fulin Guo |
| Abstract: | This paper studies the action dynamics of network coordination games with bounded-rational agents. I apply the experience-weighted attraction (EWA) model to the analysis as the EWA model has several free parameters that can capture different aspects of agents' behavioural features. I show that the set of possible long-term action patterns can be largely different when the behavioural parameters vary, ranging from a unique possibility in which all agents favour the risk-dominant option to some set of outcomes richer than the collection of Nash equilibria. Monotonicity and non-monotonicity in the relationship between the number of possible long-term action profiles and the behavioural parameters are explored. I also study the question of influential agents in terms of whose initial predispositions are important to the actions of the whole network. The importance of agents can be represented by a left eigenvector of a Jacobian matrix provided that agents' initial attractions are close to some neutral level. Numerical calculations examine the predictive power of the eigenvector for the long-run action profile and how agents' influences are impacted by their behavioural features and network positions. |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2310.18835&r=net |
| By: | Aaron S. Berman (Economic Science Institute, Chapman University); Laurence R. Iannaccone (Institute for the Study of Religion, Economics and Society, Argyros School of Business and Economics, Chapman University); Mouli Modak (Smith Institute for Political Economy and Philosophy, Chapman University) |
| Abstract: | People belong to many diferent groups, and few belong to the same network of groups. Moreover, people routinely reduce their involvement in dysfunctional groups while increasing involvement in those they fnd more attractive. The net efect can be an increase in overall cooperation and the partial isolation of free-riders, even if free-riders are never punished, excluded, or recognized. We formalize and test this conjecture with an agent-based social simulation and a multi-good extension of the standard repeated public goods game. The experiment places 16 subjects in two four-person groups arranged in a 16-group checkerboard lattice that ensures no two subjects share membership in more than one group. Our initial results from ffteen sessions (fve in each of three diferent treatments) strongly suggest that multi-group settings can indeed raise overall cooperation and reduce the impact of free-riders. We extend our understanding of this setting by imposing greater heterogeneity between groups through interweaving AI players amongst the human subjects; whereby initial sessions of this amplifes the aforementioned efects. |
| Keywords: | cooperation, public goods game, lab experiment, multi-group |
| JEL: | C72 C73 C91 C92 H41 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:23-12&r=net |
| By: | Carlos Carrillo-Tudela; Leo Kaas; Benjamin Lochner |
| Abstract: | Firms and workers predominately match via job postings, networks of personal contacts or the public employment agency, all of which help to ameliorate labor market frictions. In this paper we investigate the extent to which these search channels have differential effects on labor market outcomes. Using novel linked survey-administrative data we document that (i) low-wage firms and low-wage workers are more likely to match via networks or the public agency, while high-wage firms and high-wage workers succeed more often via job postings; (ii) job postings help firms the most in poaching and attracting high-wage workers and help workers the most in climbing the job ladder. To evaluate the implications of these findings for employment, wages and labor market sorting, we structurally estimate an equilibrium job ladder model featuring two-sided heterogeneity, multiple search channels and endogenous recruitment effort. The estimation reveals that networks are the most cost-effective channel, allowing firms to hire quickly, yet attracting workers of lower average ability. Job postings are the most costly channel, facilitate hiring workers of higher ability, and matter most for worker-firm sorting. Although the public employment agency provides the lowest hiring probability, its removal has sizeable consequences, with aggregate employment declining by at least 1.4 percent and rising bottom wage inequality. |
| Keywords: | search channels, on-the-job search, recruitment effort, sorting wage dispersion |
| JEL: | E24 J23 J31 J63 J64 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10761&r=net |
| By: | Mary Amiti; Cedric Duprez; Jozef Konings; John Van Reenen |
| Abstract: | Using firm-to-firm transactions, we show that starting to supply a "superstar" firm (large domestic firms, exporters and multinationals) boosts productivity by 8% in the medium-run. Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of "superstar spillovers". Consistent with a model of technology transfer, we find falls in markups and bigger treatment effects from technology-intensive superstars. We also show that the increase in new buyers is particularly strong within the superstar firm's network, a "dating agency" effect. This suggests an important role for raising productivity through superstars' supply chains regardless of their multinational status. |
| Keywords: | productivity, FDI, spillovers |
| Date: | 2023–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1917&r=net |