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on Network Economics |
| By: | Julien Fixary (Un iversité Paris 1 Panthéon-Sorbonne, Centre d'Economie de la Sorbonne) |
| Abstract: | We extend Bich-Fixary's theorem about the topological structure of the graph of pairwise stable networks. Namely, we show that the graph of pairwise stable networks is not only homeomorphic to the space of societies, but that it is ambient isotopic to a trivial copy of this space (a result in the line of Demichelis-Germano's unknottedness theorem. Furthermore, we introduce the notion of (extended) network dynamics which refers to families of vector fields on the set of weighted networks whose zeros correspond to pairwise stable networks. We use our version of the unknottedness theorem to show that most of network dynamics can be continuously connected to each other, without adding additional zeros. Finally, we prove that this result has an important consequence on the indices of these network dynamics at any pairwise stable network, a concept that we link to genericity using Bich-Fixary's oddness theorem |
| Keywords: | Pairwise Stability; Unknottedness Theorem; Network Dynamics; Genericity |
| JEL: | C61 C62 D85 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:22002&r= |
| 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 minimal instability to determine the networks that are more likely to emerge in the long run when agents are farsighted. A network is minimally farsighted unstable if there is no other network which is more farsightedly stable. To formulate what it means to be more farsightedly stable, we compare networks by comparing (in the set inclusion or cardinal sense) their sets of farsighted defeating networks. We next compare networks in terms of their absorbtiveness by comparing both their sets of farsighted defeating networks (i.e. in terms of their stability) and their sets of farsighted defeated networks (i.e. in terms of their reachability). A network is maximally farsighted absorbing if there is no other network which is more farsightedly absorbing. We provide general results for characterizing minimally farsighted unstable networks and maximally farsighted absorbing networks, and we study their relationships with alternative notions of farsightedness. Finally, we use experimental data to show the relevance of the new solution concepts. |
| Keywords: | networks; stability comparisons; farsighted players |
| JEL: | A14 C70 D20 |
| Date: | 2021–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021012&r= |
| By: | John Higgins (Department of Economics, University of Wisconsin, Madison, WI 53706, USA); Tarun Sabarwal (Department of Economics, University of Kansas, Lawrence, KS 66045, USA) |
| Abstract: | We study proliferation of an action in binary action network coordination games that are generalized to include global effects. This captures important aspects of proliferation of a particular action or narrative in online social networks, providing a basis to understand their impact on societal outcomes. Our model naturally captures complementarities among starting sets, network resilience, and global effects, and highlights interdependence in channels through which contagion spreads. We present new, natural, and computationally tractable algorithms to define and compute equilibrium objects that facilitate the general study of contagion in networks and prove their theoretical properties. Our algorithms are easy to implement and help to quantify relationships previously inaccessible due to computational intractability. Using these algorithms, we study the spread of contagion in scale-free networks with 1,000 players using millions of Monte Carlo simulations. Our analysis provides quantitative and qualitative insight into the design of policies to control or spread contagion in networks. The scope of application is enlarged given the many other situations across different fields that may be modeled using this framework. |
| Keywords: | Network games, coordination games, contagion, algorithmic computation |
| JEL: | C62 C72 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:202201&r= |
| By: | Marina Lagemann (Justus-Liebig-University Giessen); Peter Winker (Justus-Liebig-University Giessen) |
| Abstract: | An important role is ascribed to students’ social networks in explaining both social and ethnic differentials in educational achievement and attainment. For example, students’ social networks are assumed to influence their probability of success by providing educationally-relevant resources and by promoting effort and educational investments. The direction and strength of the network’s effect on students’ educational success is assumed to depend on the network’s precise characteristics, such as educational and migration background. As track selection by school performance (as is the case in Germany) goes hand in hand with a segregation of students by characteristics like social and migration background, it can be assumed that educational success itself has an influence on the social resources students have access to at later stages of their educational careers. Given the complexity of instruments commonly applied in self-administered questionnaires to assess students’ social resources, the quality of data on measures of network characteristics is likely to depend on the respondents’ abilities. As regards the estimation of the association between network characteristics and educational success, biased measurement of social network characteristics apparently constitutes a challenge as spurious correlation may be observed between measures of educational achievement and network characteristics if the bias systematically correlates with education. We report empirical findings on a complex instrument used in a self-administered questionnaire applied in the National Educational Panel Study (NEPS) to 9th-graders in the classroom, which was designed to measure the social resources young people have at their disposal at the point of transition from general into vocational education. The data allows identifying population subgroups who face particularly strong difficulties in completing the relevant set of questions in a consistent way. Specifically, this selection can be shown to be significantly correlated with different measures of educational achievement as well as with the respondents’ migration background. As the network characteristics we investigate, i.e., the network members’ educational and migration background, have been found to correlate with students’ educational success, ignoring this selection can be shown to heavily bias estimates of the association between educational achievement and social network characteristics. |
| Keywords: | Social networks; network characteristics; network composition; social resources; answering behavior; cognitive skills; measurement bias; migration background; educational success; educational attainment |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202202&r= |
| By: | Alexandra de Gendre (School of Economics, The University of Sydney Institute of Labor Economics (IZA)); Nicolás Salamanca (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne | Institute of Labor Economics (IZA)) |
| Abstract: | Studying with higher ability peers increases student performance, yet we have little idea why. We exploit random assignment of students to classrooms and find positive peer effects on test scores. With very rich data on seventeen potential mechanisms, we then estimate how peer effects on attitudes, parents, etc. could drive these results. Higher-achieving peers reduce student effort, increase student university aspirations, increase parental time investments, and have precise null effects elsewhere. None of these mechanisms, however, explain our peer effect on test scores. Our findings question the prevailing empirical approach to understanding the mechanisms underlying academic peer effects. |
| Keywords: | Random assignment; standardized test; mediation analysis; parental investment; school inputs |
| JEL: | I23 I26 D13 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2020n19&r= |
| By: | Aurélien Sallin; Simone Balestra |
| Abstract: | The majority of recent peer-effect studies in education have focused on the effect of one particular type of peers on classmates. This view fails to take into account the reality that peer effects are heterogeneous for students with different characteristics, and that there are at least as many peer effect functions as there are types of peers. In this paper, we develop a general empirical framework that accounts for systematic interactions between peer types and nonlinearities of peer effects. We use machine-learning methods to (i) understand which dimensions of peer characteristics are the most predictive of academic success, (ii) estimate high-dimensional peer effects functions, and (iii) investigate performance-improving classroom allocation through policy-relevant simulations. First, we find that students' own characteristics are the most predictive of academic success, and that the most predictive peer effects are generated by students with special needs, low-achieving students, and male students. Second, we show that peer effects traditionally reported by the literature likely miss important nonlinearities in the distribution of peer proportions. Third, we determine that classroom compositions that are the most balanced in students' characteristics are the best ways to reach maximal aggregated school performance. |
| Keywords: | peer effects, high dimensionality, machine learning, classroom composition |
| JEL: | C31 H75 I21 I28 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0189&r= |
| By: | Scott E. Carrell; David N. Figlio; Lester R. Lusher |
| Abstract: | The network of economists who publish in leading journals is generally perceived as small, exclusive, and tightly knit. We study how author-editor and author-reviewer network connectivity and “match” influences editor decisions and reviewer recommendations of economic research at the Journal of Human Resources (JHR). Our empirical strategy employs several dimensions of fixed effects to overcome concerns of endogenous assignment of papers to editors and reviewers in order to identify causal impacts. Results show that clubs and networks play a large role in influencing both editor and reviewer decisions. Authors who attended the same PhD program, were ever colleagues with, are affiliates of the same NBER program(s), or are more closely linked via coauthorship networks as the handling editor are significantly more likely to avoid a desk rejection. Likewise, authors from the same PhD program or who previously worked with the reviewer are significantly more likely to receive a positive evaluation. We also find that sharing “signals” of ability, such as publishing in “top five”, attending a high ranked PhD program, or being employed by a similarly ranked economics department significantly influences editor decisions and/or reviewer recommendations. |
| JEL: | A11 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29631&r= |
| By: | Egger, Hartmut (University of Bayreuth); Jahn, Elke (Institute for Employment Research (IAB), Nuremberg); Kornitzky, Stefan (University of Bayreuth) |
| Abstract: | We merge firm-level data on ownership linkages with administrative data on German workers to analyze how the position in a business group hierarchy affects workers' wages. To acknowledge that ownership linkages are not onedirectional, we propose an index of hierarchical distance to the ultimate owner that accounts for the complex network structure of business groups. After controlling for unobserved heterogeneity, we find a positive effect of larger hierarchical distance to the ultimate owner of a business group on workers' wages. To explain this finding, we develop a monitoring-based theory of business groups. Our model predicts higher wages to prevent shirking by workers if a larger hierarchical distance to the ultimate owner is associated with lower monitoring efficiency. |
| Keywords: | business groups, ownership networks, workers wages, difference-in-difference, hierarchical distance |
| JEL: | C23 J31 L23 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14956&r= |
| By: | Ali Sina Önder (Department of Economics and Finance, University of Portsmouth); Sascha Schweitzer (Department of Management, University of Bayreuth); Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | We analyze economics PhDs' collaborations in peer-reviewed journals from 1990 to 2014 and investigate such collaborations' quality in relation to each co-author's research quality, field and specialization. We find that a greater overlap between co-authors' previous research fields is significantly related to a greater publication success of co-authors' joint work and this is robust to alternative specifications. Co-authors that engage in a distant collaboration are significantly more likely to have a large research overlap, but this significance is lost when co-authors' social networks are accounted for. High quality collaboration is more likely to emerge as a result of an interaction between specialists and generalists with overlapping fields of expertise. Regarding interactions across subfields of economics (interdisciplinarity), it is more likely conducted by co-authors who already have interdisciplinary portfolios, than by co-authors who are specialized or starred in different subfields. |
| Keywords: | Collaboration, Distance, Team Formation, Research Productivity, Stratification, Specialization |
| JEL: | A11 A14 I23 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:2124&r= |
| By: | Mohamed Belhaj (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: | A monopoly sells a network good to a large population of consumers. We explore how the monopoly's profit and the consumer surplus vary with the arrival of public information about the network structure. The analysis reveals that, under homogeneous preferences for the good, degree assortativity ensures that information arrival increases both profit and consumer surplus. In contrast, heterogeneous preferences for the good can create a tension between consumer surplus and profit. |
| Keywords: | monopoly,network effects,network information,Bonacich centrality,degree assortativity,assortative mixing |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03160602&r= |
| By: | Michel Alexandre; Gilberto Tadeu Lima, Luca Riccetti, Alberto Russo |
| Abstract: | The purpose of this paper is to contribute to a further understanding of the impact of monetary policy shocks on a financial network, which we dub the “financial network channel of monetary policy transmission†. To this aim, we develop an agent-based model (ABM) in which banks extend loans to firms. The bank-firm credit network is endogenously time-varying as determined by plausible behavioral assumptions, with both firms and banks being always willing to close a credit deal with the network partner perceived to be less risky. We then assess through simulations how exogenous shocks to the policy interest rate affect some key topological measures of the bank-firm credit network (density, assortativity, size of largest component, and degree distribution). Our simulations show that such topological features of the bank-firm credit network are significantly affected by shocks to the policy interest rate, and this impact varies quantitatively and qualitatively with the sign, magnitude, and duration of the shocks. |
| Keywords: | Financial network; monetary policy shocks; agent-based modeling. |
| JEL: | C63 E51 E52 G21 |
| Date: | 2022–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2022wpecon1&r= |
| By: | Marta Silva; José Garcia-Louzão |
| Abstract: | The use of social contacts in the labor market is widespread. This paper investigates the impact of personal connections on hiring probabilities and re-employment outcomes of displaced workers in Portugal. We rely on rich matched employer-employee data to define personal connections that arise from interactions at the workplace. Our empirical strategy exploits firm closures to select workers who are exogenously forced to search for a new job and leverages variation across displaced workers with direct connections to prospective employers. The hiring analysis indicates that displaced workers with a direct link to a firm through a former coworker are roughly three times more likely to be hired compared to workers displaced from the same closing event who lack such a tie. However, we find that the effect varies according to the type of connection as well as firms’ similarity. Finally, we show that successful displaced workers with a connection in the hiring firm have higher entry-level wages and enjoy greater job security although these advantages disappear over time. |
| JEL: | J23 J63 L14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w202121&r= |
| By: | Ellen Heidinger |
| Abstract: | After arriving in a new country, refugees are most often dependent on professional support to reestablish their livelihood. It is however well documented that refugees face barriers when seeking access to services aimed at facilitating their settlement and integration. This study examines refugees’ support service needs and their actual utilization and investigates the impact of social and human capital on support service utilization. Employing data from the IAB-BAMF-SOEP Survey of Refugees, this paper highlights the diversity of refugees’ support service needs as well as large differences in utilization in eight different domains. It furthermore provides evidence for an overall positive association between predictors of human and social capital and service utilization in general and additionally reveals differences in service domains. While language proficiency is positively associated with service utilization across all service domains in the sample, previous work experience in the country of origin especially increased utilization of services related to employment and the labor market. The analyses additionally find a positive association of inter-ethnic networks, whereas intra-ethnic connections are negatively associated with service utilization across a variety of domains. These findings are especially relevant since they support the hypothesis of exclusive host community knowledge, which benefits those refugees engaging with individuals outside their own ethnic network in their efforts regarding integrational outcomes. The findings of this study accentuate the need to acknowledge the diversity in refugees’ service needs as well as the barriers to service utilization that only well-equipped refugees seem to be able to overcome. |
| Keywords: | refugees, service utilization, professional support services, human capital, social capital |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1151&r= |
| By: | Catanzaro, Daniele (Université catholique de Louvain, LIDAM/CORE, Belgium); Frohn, Martin (Université catholique de Louvain, LIDAM/CORE, Belgium); Gascuel, Olivier; Pesenti, Raffaele |
| Abstract: | The Balanced Minimum Evolution Problem (BMEP) is an [APX]-hard network design problem that consists of finding a minimum length unrooted binary tree (also called a phylogeny) having as a leaf-set a given set of molecular sequences. The optimal solution to the BMEP (i.e., the optimal phylogeny) encodes the hierarchical evolutionary relationships of the input sequences. This information is crucial for a multitude of research fields, ranging from systematics to medical research, passing through drug discovery, epidemiology, ecology, biodiversity assessment and population dynamics. In this article, we introduce the reader to the problem and present the current state-of-the-art; we include the most important achievements reached so far and the challenges that still remain to be addressed. |
| Keywords: | Combinatorial optimization ; balanced minimum evolution problem ; network design ; information entropy ; mathematics of evolution ; phylogenetics |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:20210&r= |
| By: | Noam Michelson (Bank of Israel) |
| Abstract: | In this paper I fully map public administration connected firms in Israel in the years 2007â2015. Using various novel and comprehensive datasets, I identify every listed firm with at least one former civil servant, including politicians, in its management. I diverge from existing literature by also observing connectedness to working-level former civil servants and conducting a full analysis of the matching between a firm and a former civil servant, conditional on his or her civil service experience and the firmâs characteristics. The results show that 60 percent of Israeli publicly listed firms employ a former civil servant, and that 8 percent of all directors and executives are former civil servants. The matching analysis highlights several repeated transitions that are dependent on the civil servantsâ experience and the firmsâ activities. Specifically, I find that former regulators are prevalent in firms that used to be under their regulation, and that the level of a firmâs regulatory burden is positively associated with the presence of a former civil servant in its management. Using network analysis tools, I find that former civil servants are likely to be more centrally located and powerful in the business sphere, and that their unique capital decreases as the time since they left the public administration increases. The findings in this paper lay the infrastructure for further research and public debate concerning private-public sector transitions. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:boi:wpaper:2022.03&r= |
| By: | Alessandri, Enrico (Bocconi University, Milan, and University of Urbino Carlo Bo, Urbino) |
| Abstract: | This paper uses patent citation networks to study technological change in the mining industry between 1970 and 2015. The analysis is undertaken at both the aggregate level by jointly considering all mining-related technological fields, and at the micro-level of patents in nine sub-fields, representing specific technological "sub-trajectories". Consistent with previous literature focused on other technological domains, we find that innovation patterns in the mining sector are "technology bounded", i.e. largely shaped by patenting activities carried out in a very limited range of mining technological fields, even though we detect a shift from exploration to environmental mining technologies (emergence of a new technological paradigm). In addition, we examine two aspects of technical change that have been largely disregarded in extant research: the geographical patterns of inventive activities and the role of key applicants in such patterns. We show that core mining patents and leading inventors involved originate almost exclusively from the US, so that trajectories appear to be heavily "geographically bounded", revealing that developing resource-abundant countries lag behind the technological frontier in mining. Moreover, only a few applicant firms are responsible for most inventive activities reflecting a highly concentrated oligopolistic structure, hence characterising trajectories as "applicant bounded". Similar results are observed at the level of sub-trajectories, although with some relevant exceptions, hence suggesting that a substantial heterogeneity exists within the industry and across mining-related technologies. |
| Keywords: | Technological trajectories, Technological sub-trajectories, Mining technologies, Geography of innovation, Patents, International technological frontier |
| JEL: | O31 L72 F23 R11 |
| Date: | 2021–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2021048&r= |
| By: | Catanzaro, Daniele (Université catholique de Louvain, LIDAM/CORE, Belgium); Frohn, Martin (Université catholique de Louvain, LIDAM/CORE, Belgium); Pesenti, Raffaele |
| Abstract: | The Balanced Minimum Evolution Problem (BMEP) is affected by numerical instabilities that may preclude its use on practical instances. In this article, we investigate the impact of rescaling the objective function of the problem to overcome numerical instabilities and we show how this strategy may affect the statistical consistency of the optimal solution. In particular, we show that the numerical instabilities at the core of the BMEP cannot be overcome by any kind of rescaling of the objective function. As an extension of this negative result, we also characterize the class of the input distance matrices that may give rise to numerical instabilities for large scale instances. |
| Keywords: | Combinatorial optimization ; network design ; balanced minimum evolution problem |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021026&r= |
| By: | Nelson Lind; Natalia Ramondo |
| Abstract: | We develop a Ricardian model of trade in which countries innovate ideas that diffuse across the globe. In this model, the forces of innovation and diffusion combine to shape trade substitution patterns. Innovation makes a country technologically distinct, reducing their substitutability with other countries, while diffusion between countries generates technological similarity and increases head-to-head competition. In the special case of an innovation-only model where countries do not share ideas, productivities are independent across space, and the demand system is CES. As a consequence, departures from CES expenditure reveal diffusion patterns. Our theoretical results provide a mapping between the dynamics of observable trade flows and the dynamics of innovation and knowledge diffusion. |
| JEL: | F1 O3 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29629&r= |
| By: | Max Marczinek (University of Oxford); Stephan Maurer (University of Konstanz and CEP); Ferdinand Rauch (University of Oxford, CEP and CEPR) |
| Abstract: | How do trade networks persist following disruptions of political networks? We study different types of persistence following the decline of the Hanseatic League using a panel of 21,590 city-level trade flows over 190 years, covering 1,425 cities. We use the Sound Toll data, a dataset collected by the Danish crown until 1857 that registered every ship entering or leaving the Baltic Sea, forming one of the most granular and extensive trade data sets. We measure trade flows by counting the number of ships sailing on a particular route in a given year and estimate gravity equations using PPML and an appropriate set of fixed effects. Bilateral gravity estimation results show that trade among former Hansa cities only shows persistence after its dissolution in 1669 for about 30 years, but this persistence is not robust across different regression specifications. However, when we incorporate the flag under which a ship is sailing and consider trilateral trade (where an observation is a combination of origin, destination, and flag), we find that trade persistently exceeds the gravity benchmark: Hansa cities continued to trade more with each other, but only on ships that were owned in another former Hansa city and thus sailed under a Hansa flag. Similar effects are found for trade among former Hansa cities and their trading posts abroad, yet again only conditional on the ship sailing under a former Hanseatic flag. Trade flows among the same pair of origin and destination cities, but under a different flag, do not show this persistence. Our main result shows that the identity of traders persists longer and more strongly than other forms of trading relationships we can measure. Apart from these new quantitative and qualitative insights on the persistence of trade flows, our paper is also of historic interest, as it provides new and detailed information on the speed of decline of trade amongst members of the Hanseatic League. |
| Keywords: | Hanseatic League, Hansa, Gravity |
| JEL: | F14 N73 N93 |
| Date: | 2022–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:2201&r= |