|
on Network Economics |
| By: | de Callatay, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium); Mauleon, Ana (Université catholique de Louvain, LIDAM/CORE, Belgium); Vannetelbosch, Vincent (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | We propose the notion of myopic-farsighted absorbing set to determine the networks that emerge in the long run when some players are myopic while others are farsighted. A set of networks is a myopic-farsighted absorbing set if (no external deviation) there is no myopic-farsighted improving path from networks within the set to some networks outside the set, (external stability) there is a myopic-farsighted improving path from any network outside the set to some network within the set, and (minimality) there is no proper subset satisfying no external deviation and external stability. Contrary to the notion of myopic-farsighted stable set [Herings, Mauleon and Vannetelbosch (J. Econ. Theory, 2020), Luo, Mauleon and Vannetelbosch (Econ. Theory, 2021)], we show that a myopic-farsighted absorbing set always exists. We partially characterize the myopic-farsighted absorbing sets and we provide sufficient conditions for the equivalence between a myopic-farsighted absorbing set and a myopic-farsighted stable set. We also introduce and fully characterize the notion of proper myopic-farsighted absorbing set that refines the concept of myopic-farsighted absorbing set by selecting the more absorbing networks. Finally, we consider a threshold game that illustrates the role of the relative number of farsighted and myopic players for reaching efficiency. |
| Keywords: | networks; absorbing sets; myopic and farsighted players |
| JEL: | A14 C70 D20 |
| Date: | 2021–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021003&r= |
| By: | Herings, Jean-Jacques; Mauleon, Ana (Université catholique de Louvain, LIDAM/CORE, Belgium); Vannetelbosch, Vincent (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | We study the criminal networks that will emerge in the long run when criminals are neither myopic nor completely farsighted but have some limited degree of farsightedness. We adopt the horizon-K farsighted set of Herings, Mauleon and Vannetelbosch (2019) to answer this question. We Önd that in criminal networks with n criminals, the set consisting of the complete network is a horizon-K farsighted set whenever the degree of farsightedness of the criminals is larger than or equal to (n 1). Moreover, the complete network is the unique horizon-(n 1) farsighted set. Hence, the predictions obtained in case of completely farsighted criminals still hold when criminals are much less farsighted. |
| Keywords: | Limited farsightedness, Stability, Criminal Networks |
| JEL: | A14 C70 D20 |
| Date: | 2021–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021004&r= |
| By: | Bursztyn, Leonardo; Cantoni, Davide; Yang, David Y.; Yuchtman, Noam; Zhang, Y. Jane |
| Abstract: | We study the causes of sustained participation in political movements. To identify the persistent effect of protest participation, we randomly indirectly incentivize Hong Kong university students into participation in an antiauthoritarian protest. To identify the role of social networks, we randomize this treatment’s intensity across major-cohort cells. We find that incentives to attend one protest within a political movement increase subsequent protest attendance but only when a sufficient fraction of an individual’s social network is also incentivized to attend the initial protest. One-time mobilization shocks have dynamic consequences, with mobilization at the social network level important for sustained political engagement. |
| Keywords: | political movements; social interactions; grant agreement 716837 |
| JEL: | D72 D74 I23 Z13 |
| Date: | 2021–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:107087&r= |
| By: | Mauleon, Ana (Université catholique de Louvain, LIDAM/CORE, Belgium); Sempere-Monerris, Jose J. (University of Valencia); Vannetelbosch, Vincent (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | We adopt the horizon-K farsighted set of Herings, Mauleon and Vannetelbosch (2019) to study the R&D networks that will emerge in the long run when firms are neither myopic nor fully farsighted but have some limited degree of farsightedness. We find that a singleton set consisting of a pairwise stable network is a horizon-K farsighted set for any degree of farsightedness K ≥ 2. That is, each R&D network consisting of two components of nearly equal size satisfies both horizon-K deterrence of external deviations and horizon-K external stability for K ≥ 2. On the contrary, each R&D network consisting of two components with the largest one comprising three-quarters of firms, predicted when all firms are fully farsighted, violates horizon-K deterrence of external deviations. Thus, when firms are homogeneous in their degree of farsightedness, pairwise stable R&D networks consisting of two components of nearly equal size are robust to limited farsightedness. |
| Keywords: | Limited farsightedness, Stability, R&D Networks |
| JEL: | C70 L13 L20 |
| Date: | 2021–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021006&r= |
| By: | Nizar Allouch; A. Meca; K. Polotskaya |
| Abstract: | In this paper, we develop a new game theoretic network centrality measure based on the Shapley value. To do so, we consider a coalitional game, where the worth of each coalition is the total play in the game introduced in Ballester et al. (2006). We first establish that the game is convex. As a consequence, the Shapley value belongs to the core, which enhances the attractive features of our new centrality measure. Then, we compute the Shapley value for various examples and illustrate some of its properties. |
| Keywords: | Social networks; network games; peer effects; centrality measures; Bonacich centrality; Shapley value |
| JEL: | C71 C72 C78 D85 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:2106&r= |
| By: | Alberto Bisin; Andrea Moro |
| Abstract: | We introduce a model of the diffusion of an epidemic with demographically heterogeneous agents interacting socially on a spatially structured network. Contagion-risk averse agents respond behaviorally to the diffusion of the infections by limiting their social interactions. Firms also respond by allowing employees to work remotely, depending on their productivity. The spatial structure induces local herd immunities along sociodemographic dimensions, which significantly affect the dynamics of infections. We study several non-pharmaceutical interventions; e.g., i) lockdown rules, which set thresholds on the spread of the infection for the closing and reopening of economic activities; and ii) selective lockdowns, which restrict social interactions by location (in the network) and by the demographic characteristics of the agents. Substantiating a “Lucas critique” argument, we assess the cost of naive discretionary policies ignoring agents and firms’ behavioral responses. |
| JEL: | I18 R10 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28932&r= |
| By: | Dall’erba, Sandy (Dept. of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign); Chagas, André (Departamento de Economia, Universidade de São Paulo); Ridley, William (Dept. of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign); Xu, Yilan (Dept. of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign); Yuan, Lilin (School of Economics, Nankai University, China) |
| Abstract: | The difference-in-difference (DID) framework is now a well-accepted method in quasi-experimental research. However, DID does not consider treatment-induced changes to a network linking treated and control units. Our instrumental variable network DID methodology controls first for the endogeneity of the network to the treatment and, second, for the direct and indirect role of the treatment on any network member. Monte Carlo simulations and an estimation of the drought impact on global wheat trade and production demonstrate the performance of our new estimator. Results show that DID disregarding the network and its changes leads to significant underestimates of overall treatment effects. |
| Keywords: | International Trade; Climate Change; Crop Yield. |
| JEL: | C21 F14 Q54 |
| Date: | 2021–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nereus:2021_005&r= |
| By: | Khalfaoui, Rabeh; Baumöhl, Eduard; Sarwar, Suleman; Výrost, Tomáš |
| Abstract: | The worldwide economy has experienced several changes in energy and nonenergy prices. This has motivated academics, investors, and policymakers to analyze the relationships between energy and nonenergy commodity markets. In this study, a novel approach of quantile coherency is used to examine the dependence structure between energy and nonenergy commodity pairs at different frequencies and quantiles in their joint return distribution over the period 1960:M1–2019:M10. Overall, the empirical findings illustrate evidence of low significant dependency between energy and nonenergy commodity markets across different frequencies and quantiles. In addition, our findings show that some nonenergy commodity markets have a neutral relationship with global energy commodity markets. |
| Keywords: | Energy,Nonenergy,Quantile coherency,Network analysis,Dependence,Commodity markets |
| JEL: | Q1 Q4 Q02 P28 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:235529&r= |
| By: | Maira Aguiar; Giovanni Dosi; Damian A. Knopoff; Maria Enrica Virgillito |
| Abstract: | Lockdown and vaccination policies have been the major concern in the last year in order to contain the SARS-CoV-2 infection during the COVID-19 pandemic. In this paper we present a model able to evaluate alternative lockdown policies and vaccination strategies. Our approach integrates and refines the multiscale model proposed by Bellomo et al. , 2020, analyzing alternative network structures and bridging two perspectives to study complexity of living systems. Inside dierent matrices of contacts we explore the impact of closures of distinct nodes upon the overall contagion dynamics. Social distancing is shown to be more effective when targeting the reduction of contacts among and inside the most vulnerable nodes, namely hospitals/nursing homes. Moreover, our results suggest that school closures alone would not signicantly affect the infection dynamics and the number of deaths in the population. Finally, we investigate a scenario with immunization in order to understand the effectiveness of targeted vaccination policies towards the most vulnerable individuals. Our model agrees with the current proposed vaccination strategy prioritising the most vulnerable segment of the population to reduce deaths. |
| Keywords: | Pandemic; COVID-19; epidemiological models; kinetic theory; active particles; spatial patterns; networks; vaccination; health policies. |
| Date: | 2021–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/24&r= |
| By: | Vasily V. Gusev (National Research University Higher School of Economics) |
| Abstract: | The cover of a transport, social, or communication network is a computationally complex problem. To deal with it, this paper introduces a special class of simple games in which the set of minimal winning coalitions coincides with the set of least covers. A distinctive feature of such a game is that it has a weighted form, in which weights and quota are sets rather than real numbers. This game class is termed set-weighted games. A real-life network has a large number of least covers, therefore this paper develops methods for analyzing set-weighted games in which the weighted form is taken into account. The necessary and sufficient conditions for a simple game to be a set-weighted game were found. The vertex cover game (Gusev, 2020) was shown to belong to the set-weighted game class, and its weighted form was found. The set-weighted game class has proven to be closed under operations of union and intersection, which is not the case for weighted games. The sample object is the transport network of a district in Petrozavodsk, Russia. A method is suggested for efficiently deploying surveillance cameras at crossroads so that all transport network covers are taken into account. |
| Keywords: | simple games,set-weighted games,vertex covergame,cover problem,cooperative generating functions,power indexes |
| JEL: | C70 C71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:247/ec/2021&r= |
| By: | Francesca Larosa (Department of Economics, University Of Venice CÃ Foscari Euro-Mediterranean Center on Climate Change); Nadia Ameli (University College of London); Jamie Rickman (University College of London); Sumit Kothari (University College of London) |
| Abstract: | The financial system is a key tool to enable the shift towards a climate-smart economy: by reallocating capital to low-carbon assets, it internalizes the climate externality. However, the financial sector operates as an ecosystem of evolving agents continuously shaping the outcomes they jointly generate. Hence, the consequences of global warming and the climate impacts are potentially amplified by the micro and meso dynamics of agents interacting with each other and with technologies and institutions in the space they operate. In this working paper, we present a concise but exhaustive review about complex networks models and methods applied to climate finance. We show where networks can overcome the limitations of standard economic models in both macroprudential regulation and capital allocation. We present the main challenges ahead and we discuss the importance of a renewed research-policy dialogue to advance the discipline. |
| Keywords: | Complex networks, climate finance, complexity economics, energy transition, climate change |
| JEL: | F21 F64 F65 O13 O16 P18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2021:19&r= |
| By: | Jinyong Hahn (Department of Economics, UCLA); Ruoyao Shi (Department of Economics, University of California Riverside) |
| Abstract: | We consider the local asymptotic power of Breusch and Pagan’s (1980) test for the general nonlinear models. The test is motivated by the random effects, but we consider the fixed effects for the alternative hypothesis, derive the local power, and show that the test has a power to detect the fixed effects. We also examine how the estimation noise of the maximum likelihood estimator changes the asymptotic distribution of the test under the null, and show that such a noise may be ignored in a large n large T situation, which may have a convenient implication in the possible application of the test to network models. |
| Keywords: | Lagrange multiplier test, fixed effects, local power, error component model |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucr:wpaper:202110&r= |
| By: | Abbasiharofteh, Milad; Kinne, Jan; Krüger, Miriam |
| Abstract: | The proximity framework has attracted considerable attention in a scholarly discourse on the driving forces of knowledge exchange tie formation. It has been discussed that too much proximity is negatively associated with the effectiveness of a knowledge exchange relation. However, little is known about the key factors that trigger the formation of the boundaryspanning knowledge ties. Going beyond the "dyadic" perspective on proximity dimensions, this paper argues that the key factor in bridging distances may reside at the "triadic" level. We build on the notion of "the strength of weak ties" and its recent development by investigating the innovative performance and relations of more than 600,000 German firms. We explored and extracted information from the textual and relational content of firms' websites by using machine learning techniques and hyperlink analysis. We thereby proxied the innovative performance of firms using a deep learning text analysis approach and showed that the triadic property of bridging dyadic relations is a reliable predictor of firms' innovativeness. Relations embedded in cliques (i.e., strong ties) that connect cognitively distant firms are more strongly associated with firms' innovation, whereas inter-regional relations connecting different parts of a network (i.e., weak ties) are positively associated with firms' innovative performance. Also, the results suggest that a combination of strong inter-community and weak inter-regional relations are more positively related with firms' innovativeness compared to the combination of other relation types. |
| Keywords: | weak and strong ties,proximity,knowledge exchange,innovation,web mining,natural language processing |
| JEL: | C81 D83 L14 O31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21049&r= |
| By: | Ioannis Chatziantoniou (Economics and Finance Subject Group, University of Portsmouth, Portsmouth Business School, Portland Street, Portsmouth, PO1 3DE, United Kingdom); David Gabauer (Data Analysis Systems, Software Competence Center Hagenberg, Hagenberg, Austria); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa) |
| Abstract: | In this study, we investigate dynamic integration and risk transmission among a set of six well-established crude oil markets by combining frequency connectedness (Barunik and Krehlik, 2018) with the time-varying parameter connectedness approach (Antonakakis et al., 2020). Our study covers the period from May 1996 to December 2020 and focuses on crude oil price volatility. We measure connectedness for both a high and a low-frequency band. Findings are suggestive of relatively strong co-movements over time. For the most part of the sample period, connectedness occurs in the short-run; nonetheless, starting approximately in 2010, long-run connectedness gains much prominence until at least the end of 2015. Long-run connectedness is also prevalent at the beginning of 2020 caused by the COVID pandemic. We opine that periods of increased long-run connectedness relate to deeper changes in the market for crude oil that bring about new dynamics and associations within the specific network. |
| Keywords: | World crude oil market, TVP-VAR, volatility spillovers, frequency connectedness |
| JEL: | C32 F30 G10 Q43 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202147&r= |