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on Network Economics |
| By: | Tizié Bene (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Yann Bramoullé (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Frédéric Deroïan (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université) |
| Abstract: | We study how altruism networks affect the adoption of formal insurance. Agents have private CARA utilities and are embedded in a network of altruistic relationships. Incomes are subject to both a common shock and a large idiosyncratic shock. Agents can adopt formal insurance to cover the common shock. We show that ex-post altruistic transfers induce interdependence in ex-ante adoption decisions. We characterize the Nash equilibria of the insurance adoption game. We show that adoption decisions are substitutes and that the number of adopters is unique in equilibrium. The demand for formal insurance is lower with altruism than without at low prices, but higher at high prices. Remarkably, individual incentives are aligned with social welfare. We extend our analysis to CRRA utilities and to a fixed utility cost of adoption. |
| Keywords: | Formal Insurance,Informal Transfers,Altruism Networks |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03355219&r= |
| By: | Taiki Yamada |
| Abstract: | In this paper, we consider a directed hypergraph as cooperative network, and define the Myerson value for directed hypergraphs. We prove the axiomatization of the Myerson value, namely strong component efficiency and fairness. Moreover, we modified the concept of safety defined by Li-Shan, and proved the condition about the safety of the hyperedge with respect to the Myerson value for directed hypergraphs. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.06506&r= |
| By: | Sebastiano Della Lena; Luca Paolo Merlino |
| Abstract: | In this paper, we study opinion dynamics in a balanced social structure consisting of two groups. Agents learn the true state of the world naively learning from their neighbors and from an unbiased source of information. Agents want to agree with others of the same group -- in-group identity, -- but to disagree with those of the opposite group -- out-group conflict. We characterize steady state opinions, and show that agents' influence depends on their Bonacich centrality in the signed network of opinion exchange. Finally, we study the effect of group size, the weight given to unbiased information and homophily when agents in the same group are homogeneous. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.07226&r= |
| By: | Tobias Reisch; Georg Heiler; Christian Diem; Stefan Thurner |
| Abstract: | National economies rest on networks of millions of customer-supplier relations. Some companies -- in the case of their default -- can trigger significant cascades of shock in the supply-chain network and are thus systemically risky. Up to now, systemic risk of individual companies was practically not quantifiable, due to the unavailability of firm-level transaction data. So far, economic shocks are typically studied in the framework of input-output analysis on the industry-level that can't relate risk to individual firms. Exact firm-level supply networks based on tax or payment data exist only for very few countries. Here we explore to what extent telecommunication data can be used as an inexpensive, easily available, and real-time alternative to reconstruct national supply networks on the firm-level. We find that the conditional probability of correctly identifying a true customer-supplier link -- given a communication link exists -- is about 90%. This quality level allows us to reliably estimate a systemic risk profile of an entire country that serves as a proxy for the resilience of its economy. In particular, we are able to identify the high systemic risk companies. We find that 65 firms have the potential to trigger large cascades of disruption in production chains that could cause severe damages in the economy. We verify that the topological features of the inter-firm communication network are highly similar to national production networks with exact firm-level interactions. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.05625&r= |
| By: | Mario L\'opez P\'erez; Ricardo Mansilla |
| Abstract: | In this paper we show, through the study of ordinal patterns, information theoretic and network measures and clustering algorithms, the presence of typical states in automated high-frequency records during a one-year period in the US stock market, characterized by their degree of centralized or descentralized synchronicity. We also find two whole coherent seasons of highly centralized and descentralized synchronicity, respectively. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.07047&r= |
| By: | Harold D Chiang; Yukun Ma; Joel Rodrigue; Yuya Sasaki |
| Abstract: | This paper presents novel methods and theories for estimation and inference about parameters in econometric models using machine learning of nuisance parameters when data are dyadic. We propose a dyadic cross fitting method to remove over-fitting biases under arbitrary dyadic dependence. Together with the use of Neyman orthogonal scores, this novel cross fitting method enables root-$n$ consistent estimation and inference robustly against dyadic dependence. We illustrate an application of our general framework to high-dimensional network link formation models. With this method applied to empirical data of international economic networks, we reexamine determinants of free trade agreements (FTA) viewed as links formed in the dyad composed of world economies. We document that standard methods may lead to misleading conclusions for numerous classic determinants of FTA formation due to biased point estimates or standard errors which are too small. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.04365&r= |