|
on Network Economics |
| By: | Biglaiser, Gary; Crémer, Jacques |
| Abstract: | We study the dynamics of competition in a model with network effects, an incumbent and entry. We propose a new way of representing the strategic advantages of incumbency in a static model. We then embed this static analysis in a dynamic framework with heterogeneous consumers. We completely identify the conditions under which inefficient equilibria with two platforms will emerge at equilibrium; explore the reasons why these inefficient equilibria arise; and compute the profits of the incumbent when there is only one platform at equilibrium. |
| Date: | 2016–03 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:30270&r=net |
| By: | Mitchener, Kris James (Santa Clara University); Richardson, Gary (Federal Reserve Bank of Richmond) |
| Abstract: | Interbank networks amplified the contraction in lending during the Great Depression. Banking panics induced banks in the hinterland to withdraw interbank deposits from Federal Reserve member banks located in reserve and central reserve cities. These correspondent banks responded by curtailing lending to businesses. Between the peak in the summer of 1929 and the banking holiday in the winter of 1933, interbank amplification reduced aggregate lending in the U.S. economy by an estimated 15 percent. |
| JEL: | E44 G01 G21 L14 N22 |
| Date: | 2016–03–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedrwp:16-03&r=net |
| By: | Mizuno, Takayuki; Ohnishi, Takaaki; Watanabe, Tsutomu |
| Abstract: | We investigate the structure of global inter-firm relationships using a unique dataset containing information on customers, suppliers, licensors, licensees and strategic alliances for each of 412,814 major incorporated non-financial firms in the world. We focus on three different networks: customer-supplier network, licensee-licensor network, and strategic alliance network. In/out-degree distribution of these networks follows a Pareto distribution with an exponent of 1.5. The shortest path length on the networks for any pair of firms is around six links. The networks have a scale-free property. |
| Keywords: | Inter-firm relationship, Scale-free network |
| Date: | 2016–02 |
| URL: | https://d.repec.org/n?u=RePEc:hit:remfce:37&r=net |
| By: | Johannes Van Der Pol (GRETha / UMR 5113 - Groupe de Recherche en Economie Théorique et Appliquée (GREThA) (CNRS /Université de Bordeaux)) |
| Abstract: | The focus of this paper is on the link between network structure and the financial performance of the individual firm. Under the hypothesis that firms access diverse and valuable knowledge through collaboration we analyze how firms pick their collaborators and how knowledge flows impact the financial performance of the firm. First, the evolution of the structure of the collaboration network of the French aerospace sector is analyzed between 1980 and 2013. The global structure is identified and, using an ERGM and clustering identification, the structure of the network is explained. Second, a panel regressions identifies a link between the position of the individual firm inside the network and their financial performance. |
| Keywords: | Network analysis,ERGM,Network evolution,Dynamic network,Small world,Scale free,Technological diversity,Social network analysis,Firm performance |
| Date: | 2015–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:wpaper:hal-01284993&r=net |
| By: | Premm Raj H.; Ranganathan, Kavitha |
| Abstract: | Government interventions on usage of free speech for communication has been rising of late. The government of Iraq’s ban on the Internet, ban of mobile communications in Hong Kong student protests highlight the same. Applications like Firechat which use mobile ad hoc networks (MANETs) to enable off the grid communication between mobile users, have gained popularity in these regions. However, there have been limited studies on selfish user behavior in community data sharing networks. We wish to study these data sharing communities using game theoretic principles and propose a normal form game. We model selfishness in community data sharing MANETs and define the rationality for selfishness in these networks. We also look at the impact of altruism in community data sharing MANETs and address the issue of minimum number of altruistic users needed to sustain the MANET. We validate the novel model using exhaustive simulations and empirically derive important observations. |
| URL: | https://d.repec.org/n?u=RePEc:iim:iimawp:14425&r=net |
| By: | Giulio Bottazzi; Alessandro De Sanctis; Fabio Vanni |
| Abstract: | After the outbreak of the financial crisis in 2007-2008 the level of non-performing loans (NPLs) in the economy has generally increased. However, while in some countries this has been a transitory phenomenon, in others it still represents a major threat for economic recovery and financial stability. The present work investigates the relationship between non-performing loans and systemic risk using a network-based approach. In particular, we analyze how an increase in NPLs at firm level propagates to the financial system through the network of credits and debits. To this end we develop a model with two types of agents, banks and firms, linked one another in a two-layers structure by their reciprocal credits and debits. The model is analyzed via numerical simulations and allows a) to define a synthetic measure of systemic risk and b) to quantify the resilience of the financial system to external shocks, making it particularly useful from a policy point of view. For illustrative purposes, in section 3 we present an application of the model to Italy, Germany, and United Kingdom, using empirically observed data for the three countries. |
| Keywords: | financial crisis, network theory, non-performing loans, resilience, systemic risk |
| Date: | 2016–01–03 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2016/08&r=net |
| By: | Frank Page (Indiana University); Rui Gong (Indiana University); Myrna Wooders (Vanderbilt University) |
| Abstract: | We model the structure and strategy of social interactions prevailing at any point in time as a directed network and address the following question: given the rules of network and coalition formation, preferences of individuals over networks, strategic behavior of coalitions in forming networks, and the trembles of nature, what network and coalitional dynamics are likely to emergence and persist. We formulate the problemas a dynamic, stochastic game and v equilibrium (in network and coalition formation strategies), (ii) together with the trembles of nature, this correlated stationary equilibrium determines an equilibrium Markov process of network and coalition formation, and (iii) this endogenous Markov process possesses a finite set of ergodic measures, and generates a finite, disjoint collection of nonempty subsets of networks and coalitions, each constituting a basin of attraction. Moreover, we extend to the setting of endogenous Markov dynamics the notions of pairwise stability (Jackson-Wolinsky, 1996) and the path dominance core (Page Wooders, 2009a). We show that in order for any network-coalition pair to emerge and persist, it is necessary that the pair reside in one of finitely many basins of attraction. The results we obtain here build on Page and Wooders (2009a)and the seminal contributions of Jackson and Watts (2002), Konishi and Ray (2003), and Dutta, Ghosal, and Ray (2005). |
| Keywords: | KEYWORDS: games of network formation, stationary Markov correlated equilibrium, equilibrium Markov process of network formation, basins of attraction, Harris decomposition, ergodic probability measures, dynamic path dominance core,dynamic pairwise stability. |
| JEL: | C7 C6 |
| Date: | 2016–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:van:wpaper:vuecon-sub-16-00010&r=net |
| By: | Alfred Kechia Mukong |
| Abstract: | This paper deepens the empirical analysis of peer networks by considering simultaneously their effects smoking participation and smoking intensity. Peer network is key in determining the smoking behaviour of youths, but the magnitude of the effects is still debated, questioned and inconclusive. I used a control function approach, a two-step least square and the fixed effect method to address the potential endogeneity of peer network. The results suggest positive and signicant peer effects on smoking participation and intensity. While the magnitude of the estimates of smoking participation varies across methodological approaches (ranging between 4 and 20 percent), that of smoking intensity ranges between 3 and 22 percent. Including older adults in the peer reference group increases the peer eects. The findings suggest that policies (excise tax) that directly aect the decision to smoke and the smoking intensity of the peer reference group are likely to aect own smoking behaviour. |
| Keywords: | Peer network, Smoking behavior, Control function, South Africa |
| JEL: | I10 I12 D12 C36 |
| Date: | 2016 |
| URL: | https://d.repec.org/n?u=RePEc:rza:wpaper:586&r=net |
| By: | Anderson, Simon; Jullien, Bruno |
| Abstract: | This chapter focuses on the economic mechanisms at work in recent models of advertising finance in media markets developed around the concept of two-sided markets. The objective is to highlight new and original insights from this approach, and to clarify the conceptual aspects. The chapter first develops a canonical model of two-sided markets for advertising, where platforms deliver content to consumers and resell their "attention" to advertisers. A key distinction is drawn between free media and pay media, where the former result from the combination of valuable consumer attention and low ad nuisance cost. The first part discusses various conceptual issues such as equilibrium concepts and the nature of inefficiencies in advertising markets, and concrete issues such as congestion and second-degree discrimination. The second part is devoted to recent contributions on issues arising when consumers patronize multiple platforms. In this case, platforms can only charge incremental values to advertisers which reduces their market power and affects their price strategies and advertising levels. The last part discusses the implications of the two-sided nature of the media markets for the choice of content and diversity. |
| Keywords: | Two-sided markets, ad-financed business model, single-homing consumers, competitive bottlenecks, multi-homing consumers, media see-saws, advertising congestion, genre choice, equilibrium platform variety. |
| Date: | 2016–03 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:30311&r=net |
| By: | Hale, Galina (Federal Reserve Bank of San Francisco); Kapan, Tumer ([email protected]); Minoiu, Camelia (International Monetary Fund) |
| Abstract: | We study the transmission of financial sector shocks across borders through international bank connections. For this purpose, we use data on long-term interbank loans among more than 6,000 banks during 1997-2012 to construct a yearly global network of interbank exposures. We estimate the effect of direct (first-degree) and indirect (second-degree) exposures to countries experiencing systemic banking crises on bank profitability and loan supply. We find that direct exposures to crisis countries squeeze banks’ profit margins, thereby reducing their returns. Indirect exposures to crisis countries enhance this effect, while indirect exposures to non-crisis countries mitigate it. Furthermore, crisis exposures have real effects in that they reduce banks’ supply of domestic and cross-border loans. Our results, based on a large global sample, support the notion that interconnected financial systems facilitate shock transmission. |
| JEL: | F34 F36 |
| Date: | 2016–02–04 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:2016-01&r=net |
| By: | Veronique Favre-Bonté (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Elodie Gardet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Catherine Thevenard-Puthod (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc) |
| Abstract: | Unlike industrial innovations, service innovations cannot be protected by patents or designs. Thus, the implementation of innovation networks is often seen as a key to generate a sustainable competitive advantage. In this paper, we are interested in the main forms of inter-organizational networks that led to service innovations. More precisely, this article aims to examine the relationship between the characteristics of inter-organizational networks and the type of service innovation. A typology of service innovations and a network analysis framework allowed us to study the innovations implemented by two major French winter sports resorts: the Portes du Soleil and Paradiski. In total, we studied the structure of 12 innovation networks. Our results show that, depending on the type of innovation implemented, networks are different in terms of partners involved, regulation mode and geographic scope. However, regardless of the innovation developed, it seems necessary to have a central actor to orchestrate the various partners. |
| Keywords: | Tourism, Typology,Innovation, Service, Inter-organizational network |
| Date: | 2016 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-01286701&r=net |
| By: | Joshua S. Gans; Michael L. Katz |
| Abstract: | We correct and extend the results of Gans (2015) regarding the effects of net neutrality regulation on equilibrium outcomes in settings where a content provider sells its services to consumers for a fee. We examine both pricing and investment effects. We extend the earlier paper’s result that weak forms of net neutrality are ineffective and also show that even a strong form of net neutrality may be ineffective. In addition, we demonstrate that, when strong net neutrality does affect the equilibrium outcome, it may harm efficiency by distorting both ISP and content provider investment and service-quality choices. |
| JEL: | D4 D42 D43 L1 L12 L13 |
| Date: | 2016–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:22040&r=net |
| By: | Giglio, Ricardo; Lux, Thomas |
| Abstract: | We investigate the network topology of a comprehensive data set of the world-wide population of corporate entities. In particular, we have extracted information on the boards of all companies listed in Bloomberg's archive of company profiles in October, 2015, a total of almost 100; 000 firms. We provide information on board membership overlap at various levels, and, in particular, show that there exists a core of directors who accumulate a large number of seats and are highly connected among themselves both at the level of national networks and at the worldwide aggregated level. |
| Keywords: | board and director interlocks,network core,network formation |
| JEL: | D85 L20 M14 M51 |
| Date: | 2016 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fmpwps:59&r=net |