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on Network Economics |
| By: | Vainora, J. |
| Abstract: | This paper develops an asymptotic theory for network data based on the concept of network stationarity, explicitly linking network topology with the dependence between network entities. Each pair of entities is assigned a class based on a bivariate graph statistic. Network stationarity assumes that conditional covariances depend only on the assigned class. The asymptotic theory, developed for a growing network, includes laws of large numbers, consistent autocovariance function estimation, and a central limit theorem. A significant portion of the assumptions concerns random graph regularity conditions, particularly those related to class sizes. Weak dependence assumptions use conditional α-mixing adapted to networks. The proposed framework is illustrated through an application tαααo microfinance data from Indian villages. |
| Keywords: | Network Dependence, Covariance, Random Graphs, Mixing, Robust Inference |
| JEL: | C10 C18 C31 C55 D85 |
| Date: | 2024–07–04 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2439 |
| By: | Shi, Xiangyu |
| Abstract: | I propose a mathematically tractable model to study the optimal compensation scheme in organizations with arbitrary interpersonal networks, in which agents connected in a network help neighbors and work collectively to produce a team's output, and payment is an equity share linked to the position in the network. The optimal compensation is shaped by: (a) ``incentivizing the peripheral'' mechanism: agents with a smaller (degree) centrality should be paid higher since they receive relatively less help; and (b) ``incentivizing the central'' mechanism: agents with a larger centrality should be paid higher to help others more. Due to these two conflicting mechanisms, the relationship between centrality and optimal pay may not be monotonic. When the externality of help is not pronounced, all agents should enjoy the same pay, as in a flat organization. I provide a necessary condition for monotonically increasing relationships and rule out monotonically decreasing relationships. I verify the theoretical predictions using numerical and empirical analyses. |
| Keywords: | organization, network, team production, helping behavior, compensation scheme |
| JEL: | D2 D7 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121582 |
| By: | Elena Deryugina (Bank of Russia, Russian Federation); Andrey Leonidov (Lebedev Physical Institute, Russian Federation); Alexey Ponomarenko (Bank of Russia, Russian Federation); Stanislav Radionov (Lebedev Physical Institute, Russian Federation); Ekaterina Vasilyeva (Lebedev Physical Institute, Russian Federation) |
| Abstract: | We calibrate a network model and monetary shocks based on empirical data from inputoutput tables for the Russian economy. We examine various aspects of the propagation of monetary shocks, such as the dispersion of relative prices and the local peak values of the aggregated price index achieved during the convergence to the new equilibrium. We show that these developments depend significantly on the way new money is injected into the economy. |
| Keywords: | money supply, inflation, Cantillion effects, networks, input-output tables |
| JEL: | C63 C67 D57 E31 E51 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bkr:wpaper:wps130 |
| By: | Theresa Hager (Johannes Kepler University Linz, Austria); Patrick Mellacher (University of Graz, Austria); Magdalena Rath (University of Graz, Austria) |
| Abstract: | We study the impact of gender norms on the distribution of paid and unpaid labor between women and men in an intra-household bargaining model featuring endogenous social norms. In contrast to the previous literature, which assumes a homogeneous social norm, agents are connected via explicitly modeled social networks and accordingly face heterogeneous perceptions of gender norms. In our model, social pressure to conform to gender norms exacerbates gender inequalities in the distribution of paid and unpaid labor that may result from a gender pay gap or gender-specific preferences. However, we show that the behavior of agents connected in different standardized social networks is significantly closer to a situation in which agents face no social pressure than in a scenario in which the whole of society perceives homogeneous gender norms. This is particularly true if agents are more likely to form connections to other agents that have similar preferences. |
| Keywords: | Intra-household bargaining, Social norms, Agent-based model, Social network. |
| JEL: | C63 C78 D13 J16 J22 |
| Date: | 2023–06 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2023-05 |
| By: | Marc-Antoine Faure; Bárbara Polo Martin; Fabio Cremaschini; César Ducruet |
| Abstract: | Conflicts, whether political, commercial or military, affect transport networks. Operators seek to avoid the most tense areas or reconsider certain routes. Certain links can be disrupted in case of local geopolitical tensions, which can have a significant global impact. The article is devoted to studying Ukraine’s maritime network and identifying changes in these structures because of the conflict that started in 2014. The purpose of the paper is to measure and visualise the main changes in the Ukrainian seaport system and maritime forelands from 2010 until the most recent data available (December 2023), from a network models, bilateral trade and route simulation framework. The principal results confirm the huge impact of military conflict on port connectivity, thereby contributing to the recent literature on shipping network vulnerability. |
| Keywords: | Black Sea, Complex networks, Shipping Trade, Russian-Ukrainian War |
| JEL: | F14 F51 R40 L91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-24 |
| By: | Qiang Gong (Zhongnan University of Economics and Law [China]); Yujing Xu (Shenzhen Univerisity [Shenzhen]); Huanxing Yang (OSU - Ohio State University [Columbus]) |
| Abstract: | We study a dynamic model of price competition with differentiated products in which new generations of consumers acquire information about available products from their friends of previous generations. The social network, which links consumers across generations, affects the evolution of consumers' awareness of products and firms' long-term (steady-state) market shares. Focusing on steady-state equilibria, we examine how the structure of the social network—including connectivity and homophily—influences market shares, pricing, and welfare. |
| Keywords: | Learning from friends, Social network, Price competition, Market Shares, Differentiated products |
| Date: | 2024–05–27 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04625204 |
| By: | Pierre Cotterlaz; Arthur Guillouzouic |
| Abstract: | This paper shows that the negative effect of geographical distance on knowledge flows stems from how firms gain sources of knowledge through their existing network. We start by documenting two stylized facts. First, in aggregate, the distance elasticity of patent citations flows has remained constant since the 1980s, despite the rise of the internet. Second, at the micro level, firms disproportionately cite existing knowledge sources, and patents cited by their sources. We introduce a framework featuring the latter phenomenon, and generating a negative distance elasticity in aggregate. The model predicts Pareto-distributed innovator sizes, and citation distances increasing with innovator size. These predictions hold well empirically. We investigate changes of the underlying parameters and geographical composition effects over the period. While the distance effect should have decreased with constant country composition, the rise of East Asian economies, associated to large distance elasticities, compensated lower frictions in other countries. |
| Keywords: | Knowledge Diffusion;Innovation Networks;Spatial Frictions;Patent Citation |
| JEL: | L14 O33 R12 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-08 |