63 research outputs found
A Survey In Network Economics: Spam Email, Internet Routing, Graphical Economics, and International Trade
A survey of current topics in network economics, a relatively new and growing field of research at the intersection of economics and network theory. Case studies in spam email, Internet routing, and graphical economics are presented as practical applications. A network economic analysis of international trade is also offered. Most of the current literature addresses a highly technical audience. This paper intends to bridge the gap by presenting network economics in language that will be familiar to students of economics
IMPLICATIONS OF A CARBON BASED ENERGY TAX FOR U.S. AGRICULTURE
Policies to mitigate greenhouse gas emissions are likely to increase the prices for fossil fuel based energy. Higher energy prices would raise farmers' expenditure on machinery fuels, irrigation water, farm chemicals, and grain drying. To compute the economic net impacts of increased farm input costs on agricultural production after market adjustment, we employ a price endogenous sector model for United States agriculture. Results show little impact on net farm income in the intermediate run.Agricultural Sector Model, Energy Tax, Greenhouse Gas, Emission Reduction
Endogenous Trading Networks
We investigate the effects of a class of trading protocols on the architecture and efficiency properties of endogenously formed trading networks. In our model, the opportunity to sell valuable objects occurs randomly to different individuals. A sale can only be realized if two individuals are connected, directly or indirectly, but forming and maintaining a trading relation is a costly investment. When the outcome of trading is efficient and provides no intermediation rents, a tension between equilibrium and efficient networks emerges when the cost of forming a link is at an intermediate level. There are two types of inefficiencies. Either all equilibrium networks are under- connected when compared to efficient networks, or a multiplicity of equilibriam may exist and agents may fail to coordinate on the efficient equilibrium network
On the emergence of scale-free production networks
We propose a simple dynamical model of the formation of production networks
among monopolistically competitive firms. The model subsumes the standard
general equilibrium approach \`a la Arrow-Debreu but displays a wide set of
potential dynamic behaviors. It robustly reproduces key stylized facts of
firms' demographics. Our main result is that competition between intermediate
good producers generically leads to the emergence of scale-free production
networks.Comment: 31 pages, 15 figure
Exchange of Services in Networks: Competition, Cooperation, and Fairness
Exchange of services and resources in, or over, networks is attracting
nowadays renewed interest. However, despite the broad applicability and the
extensive study of such models, e.g., in the context of P2P networks, many
fundamental questions regarding their properties and efficiency remain
unanswered. We consider such a service exchange model and analyze the users'
interactions under three different approaches. First, we study a centrally
designed service allocation policy that yields the fair total service each user
should receive based on the service it others to the others. Accordingly, we
consider a competitive market where each user determines selfishly its
allocation policy so as to maximize the service it receives in return, and a
coalitional game model where users are allowed to coordinate their policies. We
prove that there is a unique equilibrium exchange allocation for both game
theoretic formulations, which also coincides with the central fair service
allocation. Furthermore, we characterize its properties in terms of the
coalitions that emerge and the equilibrium allocations, and analyze its
dependency on the underlying network graph. That servicing policy is the
natural reference point to the various mechanisms that are currently proposed
to incentivize user participation and improve the efficiency of such networked
service (or, resource) exchange markets.Comment: to appear in ACM Sigmetrics 201
Keeping up with the neighbours: social interaction in a market economy
We consider a world in which individuals have private endowments and trade in markets, while their utility is sensitive to the consumption of their neighbors. Our interest is in understanding how social structure of comparisons, taken together with the familiar fundamentals of the economy ďż˝ endowments, technology and preferences ďż˝ shapes equilibrium prices, allocations and welfare. We find that equilibrium prices and allocations depend on average individual centrality in the social network. As we add links to a social network, the centralities rise and this pushes up prices of the socially sensitive good. Newly linked agents demand more of the socially sensitive good, while the reverse happens with regard to the standard good. We derive a formula to compute the critical link, i.e., the new link which maximizes price increase. We then turn to a model with heterogenous endowments, and find that inequality in network centrality and in wealth inequality reinforce each other. Thus a transfer of resources from less to more central agents raises prices of the socially sensitive good and alters allocations and utilities of all agents. We show by example that poor individuals lose utility while rich individuals gain utility as society moves from segregation to integration.
- …