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on Network Economics |
| By: | Meyer, Peter B. (U.S. Bureau of Labor Statistics) |
| Abstract: | Airplanes were invented by hobbyists and experimenters, and some personal computers were as well. Similarly, many open-source software developers are interested in the software they make, and not focused on profit. Based on these cases, this paper has a model of agents called tinkerers who want to improve a technology for their own reasons, by their own criteria, and who see no way to profit from it. Under these conditions, they would rather share their technology than work alone. The members of the agreement form an information network. The network's members optimally specialize based on their opportunities in particular aspects of the technology or in expanding or managing the network. Endogenously there are incentives to standardize on designs and descriptions of the technology. A tinkerer in the network who sees an opportunity to produce a profitable product may exit the network to create a startup firm and conduct focused research and development. Thus a new industry can arise. |
| Keywords: | Technological Change, Open Source Software, Uncertainty, Innovation, Invention, Collective Invention, Hackers, Hobbyists, Experimenters, Airplane |
| JEL: | O3 O31 O34 N10 D83 D85 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec070120&r=net |
| By: | Michal Grajek (ESMT European School of Management and Technology); Tobias Kretschmer (Ludwig-Maximilians-Universität) |
| Abstract: | We study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. Specifically, we address two questions: First, can we draw conclusions about the underlying drivers of technology diffusion by studying usage intensity? Second, what is the effect of high penetration of previous generations and competing networks on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription. |
| Keywords: | Cellular telephony, diffusion, usage intensity, network effects, consumer heterogeneity, fixed-mobile substitutability |
| JEL: | L1 L52 O38 |
| Date: | 2007–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:esm:wpaper:esmt-07-003&r=net |
| By: | Attila Ambrus (Harvard University); Markus Mobius (Harvard University); Adam Szeidl (University of California, Berkeley) |
| Abstract: | We build a model of informal risk-sharing among agents organized in a social network. A connection between individuals serves as collateral that can be used to enforce insurance payments. We characterize incentive compatible risk-sharing arrangements for any network structure, and develop two main results. (1) Expansive networks, where every group of agents have a large number of links with the rest of the community relative to the size of the group, facilitate better risk-sharing. In particular, “two-dimensional” village networks organized by geography are sufficiently expansive to allow very good risk-sharing. (2) In second-best arrangements, agents organize in endogenous “risksharing islands” in the network, where shocks are shared fully within but imperfectly across islands. As a result, risk-sharing in second-best arrangements is local: socially closer agents insure each other more. In an application of the model, we explore the spillover effect of development aid on the consumption of non-treated individuals. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ads:wpaper:0079&r=net |