Essays On The Economics Of Networks

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Essays in the Economics of Networks

Author : Mircea Ioan Marcu
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (664 download)

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Book Synopsis Essays in the Economics of Networks by : Mircea Ioan Marcu

Download or read book Essays in the Economics of Networks written by Mircea Ioan Marcu and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent developments in the economics of networks have shown the potential fallacies of using one-sided logic in two-sided markets. In the third study I develop a two-sided market model to analyze the pricing and quality decisions of a profit maximizing managed care organization (MCO) in the presence of indirect network externalities between doctors and patients. The managed care organization faces trade-offs when choosing the quality of service, insurance premiums, and physician reimbursements. These trade-offs depend on patient health risk and physician cost distributions, the elasticity of supply of physicians with respect to reimbursements, the marginal cost of service quality, and the marginal utility derived by patients from access to a broader network of physicians and the quality of health services. In the case of iso-elastic distributions of patient health risk and physician cost of treatment, an increase in the cost of providing quality decreases the quality provided by the MCO, which leads to fewer policyholders, lower physician reimbursements, and fewer doctors in the preferred network. The insurance premium also decreases. An increase in the health risk of the population results in lower quality, lower reimbursements, and fewer physicians in the MCO's network. The insurance premium also decreases, but the decrease is smaller than the decrease in individuals' utility due to lower quality and fewer physicians, which leads to fewer policyholders.

Essays in the Economics of Networks

Author : Arun Naresh Advani
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (116 download)

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Book Synopsis Essays in the Economics of Networks by : Arun Naresh Advani

Download or read book Essays in the Economics of Networks written by Arun Naresh Advani and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays in the Economics of Networks

Author : Edoardo Gallo
Publisher :
ISBN 13 :
Total Pages : 196 pages
Book Rating : 4.:/5 (76 download)

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Book Synopsis Essays in the Economics of Networks by : Edoardo Gallo

Download or read book Essays in the Economics of Networks written by Edoardo Gallo and published by . This book was released on 2010 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Economics of Networks

Author : Soomin Jung
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (127 download)

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Book Synopsis Essays on Economics of Networks by : Soomin Jung

Download or read book Essays on Economics of Networks written by Soomin Jung and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is on economics of networks. The first two chapters study what network sellers and buyers create when there exist gains of trade. The last chapter studies information diffusion on a given network. In the first two chapters, I study sellers and buyers who trade via bargaining. Agents can often increase their bargaining power by increasing the value of their outside options. They may seek to invest in costly relationships with potential trade partners. That is, they form an endogenous trade network and then bargain with their trade partners. I study a two-stage model in which sellers and buyers trade non-cooperatively on an endogenous trade network. In Chapter 1, sellers are assumed to have no capacity constraints. The main result of this chapter is that even though agents can increase their bargaining power by forming relationships with multiple trading partners, there exists an efficient subgame perfect equilibrium--that is, all the gains from trade are realized with the minimum costs and without a delay. Chapter 2 assumes that sellers are endowed with one unit of a good for a trade following the tradition of the bargaining literature. The capacity constraint increases the seller's bargaining power if there are many buyers who want to buy a good from each seller. This may give incentives to sellers to invest in superfluous links. Chapter 2 shows that the market can achieve efficiency even if sellers have the capacity constraint. In specific, a bilateral trading network is supported as an equilibrium network. Chapter 3 studies information diffusion on a fixed network through word-of-mouth. Word-of-mouth is an effective tool that a firm leverages to advertise the quality of its products to uninformed consumers. Such viral marketing, however, may fail if the consumers' "words" are not credible. Suppose that consumers are located on a given network and a firm "buys" one consumer and employs her as an implant to make recommendations of a product to her neighbors regardless of the actual quality of the good. I show that the viral marketing fails if the consumer network has a node with an excessively high degree of connection--for instance, a star network or a complete network--which undermines the credibility of the recommendation from an implant employed by a firm to promote a bad quality product. Also, if the viral marketing works, a good quality product is spread out over the network while a bad quality is driven out.

Essays on the Formation of Social and Economic Networks

Author : Liza Charroin
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)

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Book Synopsis Essays on the Formation of Social and Economic Networks by : Liza Charroin

Download or read book Essays on the Formation of Social and Economic Networks written by Liza Charroin and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a world where networks become a dominant form of organization, the structure of networks and the position of individuals in these networks affect individual behavior and aggregate economic outcomes. The analysis of network formation by a central planner or by individuals themselves is at the heart of this thesis on the economics of networks.Chapter 1 theoretically studies the optimal formation and protection of networks by a central planner knowing that an external agent can destroy k links. The protection of the network can be guaranteed either by densifying the links between nodes, or by protecting the links. When the cost of protection is relatively small, a minimally connected network composed of protected links guarantees the communication flow; if this cost is high, the optimal solution is to form a symmetric network where each node has at least k+1 non-protected links.Chapter 2 explores the decentralized formation of networks in the laboratory by analyzing individual linking formation decisions when one agent has a higher value than others and that the linking formation process is sequential. The results show that sequentiality facilitatesthe coordination on efficient networks but that do not correspond to the Subgame PerfectEquilibrium. The heterogeneity across agents increases the asymmetry of networks because of the polarization of links on the agent with a higher value.Chapter 3 studies the impact of the endogenous formation of networks on the importance of peer effects, applied to dishonest behavior. In order to identify the effects of social comparisons, two controlled environments are designed in the laboratory in which individuals choose or not their peers, and then observe their behavior. The results show that peer effects on dishonest behavior are significantly higher when individuals can choose their peers.

Essays on the Economics of Networks

Author : Alexander Graupner
Publisher :
ISBN 13 :
Total Pages : 110 pages
Book Rating : 4.:/5 (116 download)

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Book Synopsis Essays on the Economics of Networks by : Alexander Graupner

Download or read book Essays on the Economics of Networks written by Alexander Graupner and published by . This book was released on 2020 with total page 110 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains three chapters on how economic networks affect various market situations. Broadly, they cover contracting and monopoly pricing in the presence of economic networks. The first chapter considers a principal, many agents contracting problem. Agents sit on a network of complementarities. That is, the effort of one agent affects the value of effort for those with whom he connects. Given this structure on effort, I characterize the first best contract. This contract induces efforts that reflect the agents Bonacich centrality in the symmetrized network. I then consider a variety of bilateral contracts, and compare their values for the principal. First, I consider bilateral forcing contracts. These contracts induce less effort per agent than the first best contract. Agents' effort distortions depends on their bibliographic coupling. I show that it is this novel measure that drives effort down for certain agents. Networks with high total bibliographic coupling have a large profit gap from first to second best forcing contracts. I compare these contracts to bilateral linear contracts, and show that linear contracts outperform the forcing contracts. Finally, I show that base and bonus contracts are profit maximizing for the principal, and implement first best. The second chapter considers a monopolist who introduces a new durable good to a base of consumers who are connected on a network of communication. Consumers are initially unaware of the product, and must learn about its existence through their neighbors. Each consumer who purchases informs a group of neighbors, and the information flows through consumers as a branching process. The monopolist commits to a dynamic price path on the infinite horizon. I find that though consumers are fully strategic, the monopolist finds it optimal to serve the entire consumer base infinitely often, which implies a sales structure. I then derive the optimal price path for a simplified model of two agents, and derive comparative statics. The third chapter considers a monopolist who sells to a consumer base that is largely unaware of the product. The monopolist spreads the information of the product to consumers by the past purchasers. I assume that the monopolist knows the exact network structure on which consumers live, and sets prices based off of consumers positions and the aware set of consumers. I consider three different pricing strategies. First, I consider a setting where the monopolist can price discriminate based on the consumers' network position. In this case I am able to find which consumers are important to the information flow. Consumers who are aware early get a discount, along with agents who are critical to the information flow. If there are consumers who can only be reached through one consumer purchasing, this consumer is offered a discounted price. I see that these ideas follow through to the single priced monopolist case, where prices fluctuate if many critical agents exist. Finally, I consider the optimal mechanism, where the monopolist can price discriminate based off of network position and price. In this case the monopolist can find the optimal flow of information and implement it.

Essays in the Economics of Networks and Standards

Author : Tobias Kretschmer
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (112 download)

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Book Synopsis Essays in the Economics of Networks and Standards by : Tobias Kretschmer

Download or read book Essays in the Economics of Networks and Standards written by Tobias Kretschmer and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays in the Economics of Networks

Author : A. N. Advani
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (16 download)

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Book Synopsis Essays in the Economics of Networks by : A. N. Advani

Download or read book Essays in the Economics of Networks written by A. N. Advani and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on the Economics of Networks and Standards

Author : Tobias Kretschmer
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (782 download)

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Book Synopsis Essays on the Economics of Networks and Standards by : Tobias Kretschmer

Download or read book Essays on the Economics of Networks and Standards written by Tobias Kretschmer and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on the economics of networks

Author : Xiangyu Wu
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)

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Book Synopsis Essays on the economics of networks by : Xiangyu Wu

Download or read book Essays on the economics of networks written by Xiangyu Wu and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on the Economics of Networks and Social Relations

Author : Pekka Sääskilahti
Publisher :
ISBN 13 : 9789517919661
Total Pages : 163 pages
Book Rating : 4.9/5 (196 download)

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Book Synopsis Essays on the Economics of Networks and Social Relations by : Pekka Sääskilahti

Download or read book Essays on the Economics of Networks and Social Relations written by Pekka Sääskilahti and published by . This book was released on 2005 with total page 163 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Three Essays on Networks and Public Economics

Author : Pier-André Bouchard St Amant
Publisher :
ISBN 13 :
Total Pages : 336 pages
Book Rating : 4.:/5 (864 download)

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Book Synopsis Three Essays on Networks and Public Economics by : Pier-André Bouchard St Amant

Download or read book Three Essays on Networks and Public Economics written by Pier-André Bouchard St Amant and published by . This book was released on 2013 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis is a collection of three essays. The first two study how ideas spread through a network of individuals, and how it an advertiser can exploit it. In the model I develop, users choose their sources of information based on the perceived usefulness of their sources of information. This contrasts with previous literature where there is no choice made by network users and thus, the information flow is fixed. I provide a complete theoretical characterization of the solution and define a natural measure of influence based on choices of users. I also present an algorithm to solve the model in polynomial time on any network, regardless of the scale or the topology. I also discuss the properties of a network technology from a public economic standpoint. In essence, a network allows the reproduction of ideas for free for the advertiser. If there is any free-riding problem, I show that coalitions of users on the network can solve such problem. I also discuss the social value of networks, a value that cannot be captured for profit. The third essay is completely distinct from the network paradigm and instead studies funding rules for public universities. I show that a funding rule that depends solely on enrolment leads to "competition by franchise" and that such behavior is sometimes inefficient. I suggest instead an alternate funding rule that allows government to increase welfare without increasing spending in universities.

Essays on Heterogeneity in Economic Networks

Author : Malte Cherdron
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (722 download)

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Book Synopsis Essays on Heterogeneity in Economic Networks by : Malte Cherdron

Download or read book Essays on Heterogeneity in Economic Networks written by Malte Cherdron and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Economic Networks

Author : Benjamin Golub
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (768 download)

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Book Synopsis Essays on Economic Networks by : Benjamin Golub

Download or read book Essays on Economic Networks written by Benjamin Golub and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation theoretically analyzes how networks of relationships among decision-makers affect two kinds of economic processes: (i) investment in public goods; and (ii) repeated updating of beliefs or behaviors based on observing neighbors. The results connect these processes to the spectral properties of networks -- that is, eigenvalues and eigenvectors -- and use the connection to shed light on economic outcomes. The first essay, based on joint work with Matthew Elliott, focuses on games in which each player simultaneously exerts costly effort that provides different benefits to each other player. The goal is to find and describe effort profiles that are immune to coordinated coalitional deviations when such a game is played repeatedly. Formally, these effort profiles are the ones that can be sustained in a strong Nash equilibrium of the repeated game. We introduce a class of effort profiles that are called centrality-stable. These are characterized by a network centrality condition: agent A's contribution (defined as effort level times marginal cost) is equal to a weighted sum of the contributions of those who help A; the weight on B's contribution measures the marginal benefit B's effort provides to A. Under certain assumptions (mainly concavity of utility functions), centrality-stable profiles exist, are Pareto-efficient, and any such profile is sustainable in a coalitionally robust equilibrium of the repeated game. Centrality-stable profiles also have an alternative definition: they are those at which all agents are first-order indifferent to scaling all efforts by a factor near $1$. This single condition rules out all profitable coalitional deviations. The results are obtained without parametric assumptions, using the theory of general equilibrium and its relation to the core, along with the Perron-Frobenius spectral theory of nonnegative matrices. When agents are uncertain about each other's utility functions but can verify marginal costs and benefits at an implemented effort profile, then the centrality-stable profiles are the only ones that are immune to manipulation through misreporting of preferences. The second essay, based on joint work with Matthew O. Jackson, studies learning in a setting where agents receive independent noisy signals about the true value of a variable and then communicate in a network. They naively update beliefs by repeatedly taking weighted averages of neighbors' opinions. We show that all opinions in a large society converge to the truth if and only if the influence of the most influential agent on the long-run beliefs vanishes as the society grows. We also identify obstructions to this, including the existence of prominent groups, and provide structural conditions on the network ensuring efficient learning. The third essay, also based on joint work with Matthew O. Jackson, examines how the speed of such an updating process depends on homophily: the tendency of agents to associate disproportionately with those having similar traits. When agents' beliefs or behaviors are developed by averaging what they see among their neighbors -- as in the learning model discussed above or in a myopic best-reply dynamic -- convergence to a consensus is slowed by the presence of homophily, but is not influenced by network density. This is in stark contrast to the viral spread of a belief or behavior along shortest paths -- a process whose speed is increasing in network density but does not depend on homophily. In deriving these results, we propose a new, general spectral measure of homophily based on the relative frequencies of interactions among different groups.

Essays on Social and Economic Networks

Author : Timo Hiller
Publisher :
ISBN 13 :
Total Pages : 67 pages
Book Rating : 4.:/5 (851 download)

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Book Synopsis Essays on Social and Economic Networks by : Timo Hiller

Download or read book Essays on Social and Economic Networks written by Timo Hiller and published by . This book was released on 2011 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three papers in the field of social and economic networks. In the first, called Peer Effects in Endogenous Networks, I build a model of endogenous net- work formation in the presence of peer effects, which play an important role for decisions concerning educational attainment, criminal activity, labor market participation and R&D expenditures of firms. The class of payoff functions assumed induce local complementar- ities in effort levels and positive local externalities. Links are one-sided and agents move simultaneously in links and effort levels. I find that equilibrium networks display - other than the complete and the empty network - a core-periphery structure, which is commonly observed in empirical studies. Ex-ante homogenous agents may obtain very different ex-post outcomes, depending on the network that arises in equilibrium. Multiplicity of equilibria serves as an explanation for large differences in behaviour across otherwise identical groups. The second paper, titled Alliance Formation and Coercion in Networks, presents a game-theoretic model of network formation, which allows agents to enter bilateral alliances and to extract payoffs from enemies. Each pair of agents creates a surplus of one, which allies divide in equal parts. If agents are enemies, then the agent with more allies obtains a larger share of the surplus. I show that Nash equilibria are of two types. First, a state of utopia, where all agents are allies. Second, asymmetric equilibria, such that agents can be partitioned into sets of different size, where agents within the same set are allies and agents in different sets are enemies. These results stand in contrast to coalition formation games in the economics of conflict literature, where stable group structures are generally symmetric. The model also provides a game-theoretic foundation for structural balance, a long-standing notion in social psychology, which has been fruitfully applied to the study of alliance formation in international relations. The third paper, A Note on Stochastically Stable States for Alliance Formation and Coercion in Networks, introduces dynamics into the model of the second paper and provides a conjecture for stochastically stable states. At every time period t and with fixed probability p, each agent adjusts his strategy myopically, while with small probability E chooses his strategy at random. The configuration where all agents sustain only positive links is shown to not be stochastically stable. Stochastically stable state are thought to be such that the number of cliques is maximal, under a restriction on the relative size of groups.

Essays on the Economics of Networks Under Incomplete Information

Author : Theodoros Rapanos
Publisher :
ISBN 13 : 9789176494684
Total Pages : pages
Book Rating : 4.4/5 (946 download)

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Book Synopsis Essays on the Economics of Networks Under Incomplete Information by : Theodoros Rapanos

Download or read book Essays on the Economics of Networks Under Incomplete Information written by Theodoros Rapanos and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on the Economics of Social Networks

Author : Won Hee Park
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (951 download)

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Book Synopsis Essays on the Economics of Social Networks by : Won Hee Park

Download or read book Essays on the Economics of Social Networks written by Won Hee Park and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of two projects, both concerned with how social networks form and how they affect economic decisions. In the first project, entitled Identifying Influential Agents in a Social Network, I define influence centrality, a new measure of influence which combines information on node and neighbor characteristics as well as information on the network structure, by building a model of friendship formation and peer effects and calculating the change in the equilibrium behavior of the network when one node changes its behavior. I apply the model to the context of smoking among middle and high school students and show that a targeted anti-smoking intervention in which a small number of influential smoking students are treated may be more efficient than a uniform program where every student in the school receives the same anti-smoking treatment. The second project, entitled Quantifying Spillovers in Network Formation Over Time, is a joint work with Sean Chu and Shankar Kalyanaraman at Facebook. The goal of the project is to separately identify and understand the relative importance of network effects and unobserved heterogeneity in a multi-period network formation model. Here, we define network effects to be the effect of the number of mutual friends on the probability of friendship and assume that unobserved heterogeneity is time-consistent. We estimate the model on a de-identified panel data set from a small group of users on Facebook and find that both network effects and unobserved heterogeneity are statistically and economically significant predictors of friendship formation on Facebook. We further re-estimate the model first, without network effects and next, without unobserved heterogeneity. Comparing the results from these specifications, we find that network effects play a more important role than unobserved heterogeneity in network formation models on Facebook.