30,828 research outputs found

    Contagious Synchronization and Endogenous Network Formation in Financial Networks

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    When banks choose similar investment strategies the financial system becomes vulnerable to common shocks. We model a simple financial system in which banks decide about their investment strategy based on a private belief about the state of the world and a social belief formed from observing the actions of peers. Observing a larger group of peers conveys more information and thus leads to a stronger social belief. Extending the standard model of Bayesian updating in social networks, we show that the probability that banks synchronize their investment strategy on a state non-matching action critically depends on the weighting between private and social belief. This effect is alleviated when banks choose their peers endogenously in a network formation process, internalizing the externalities arising from social learning.Comment: 41 pages, 10 figures, Journal of Banking & Finance 201

    Interdependent policy instrument preferences: a two-mode network approach

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    In policymaking, actors are likely to take the preferences of others into account when strategically positioning themselves. However, there is a lack of research that conceives of policy preferences as an interdependent system. In order to analyse interdependencies, we link actors to their policy preferences in water protection, which results in an actor-instrument network. As actors exhibit multiple preferences, a complex two-mode network between actors and policies emerges. We analyse whether actors exhibit interdependent preference profiles given shared policy objectives or social interactions among them. By fitting an exponential random graph model to the actor-instrument network, we find considerable clustering, meaning that actors tend to exhibit preferences for multiple policy instruments in common. Actors tend to exhibit interdependent policy preferences when they are interconnected, that is, they collaborate with each other. By contrast, actors are less likely to share policy preferences when a conflict line divides them

    Transitions: An Institutionalist Perspective

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    A transition to a new technological regime is complete (and stable) when accompanied with a co-stabilization between the mode of regulation and the regime of accumulation. Key to understanding the dynamics of transitions are the factors, including institutions, that “regulate” and stabilize the regime of accumulation over time. However, the available frameworks for institutional analysis employ arbitrary and narrow definition of institutions, focus mainly on the policy domain, and do not pay sufficient attention to the evolutionary characteristics of change as manifested in emergence of numerous institutions that underlie transitions. This paper consists of three parts. The first part critically reviews and synthesizes some of the main approaches for conducting institutional analysis. The second part rearticulates the concept of “transitions”, or technological regime shifts, from a systems perspective to make a case for investigating transitions as multi-level, multi-scale, and multi-system phenomena best understood in their institutional contexts. The third part proposes a framework for examining institutional change and demonstrates how this framework may be used to identify the key factors and conditions whose convergence might result in transitions in a given subsystem. Examples are drawn from the Dutch waste management subsystem to demonstrate how this framework should be operationalized.economics of technology ;

    Entrepreneurial in-migrants and economic development in rural England

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    Counterurbanisation has generally been viewed as a negative phenomenon, but Stockdale and Findlay (2004) presented rural in-migration as potentially “a catalyst for economic regeneration” based on in-migrants’ business activity. More than half of rural microbusinesses in the North-East of England are owned by in-migrants and provide an estimated 10% of jobs in the rural North-East (Bosworth, 2006). In the light of these new drivers of rural development, exogenous and endogenous approaches alone are increasingly inadequate (Lowe et al., 1995; Murdoch, 2000; Terluin, 2003). Ray instead proposed Neo-Endogenous Development, defined as “endogenous based development in which extra-local factors are recognised as essential but which retains belief in the potential of local areas to shape their future” (2001, p.4). Preliminary research suggests that in-migrants tend to retain more extensive business networks while developing valuable local contacts (Bosworth, 2006). As endogenous actors with diverse networks, in-migrants are well placed to strengthen connectivity with the ‘extra-local’ and introduce new vitality to rural economies
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