Competing Transport Networks

In a circular city model, I consider network design and pricing decisions for a single fast transport connection that faces competition from a slower but better accessible transport mode. To access the fast transport network individuals have to make complementary trips by slow mode. This fact has interesting implications on the location decisions. I show that in the presence of competition the profit-maximizing and socially optimal decision would be to cluster the two stations. By contrast, in the absence of competition both a profit-maximizing firm and a social planner would locate the two stations on opposite sides of the circle

The Economics of Networks: theory and empirics

Wherever we are, networks are all around us. The roads that we travel form a network. The websites that we visit form an enormous information network. But, above all, we are part of a network ourselves, the network of social contacts and relations. These networks play an important role in economic life, but it is not always clear in what way. This thesis analyzes problems related to three types of networks: a network of collaborating economists, a network of job contacts, and a transport network. The thesis uses a combination of theoretical models and novel empirical techniques to show how network effects shape markets and societies

Strong Ties in a Small World

In this paper we test the celebrated `Strength of weak ties' theory of Granovetter (1973). We test two hypotheses on the network structure in a data set of collaborating economists. While we find support for the hypothesis of transitivity of strong ties, we reject the hypothesis that weak ties reduce distance more than strong ties do. We relate this surprising result to two different views of society. Whereas the classical view has been that society consists of different communities with strong ties within communities and weak ties between, the community of economic researchers has an interlinked star structure with strong ties between the stars. In such a world, strong ties are more important than weak ties

A Social Network Analysis of Occupational Segregation

This paper proposes a simple social network model of occupational segregation, generated by the existence of inbreeding bias among individuals of the same social group. If network referrals are important in getting a job, then expected inbreeding bias in the social structure results in different career choices for individuals from different social groups, which further translates into stable occupational segregation equilibria within the labour market. Our framework can be regarded as complementary to existing discrimination or rational bias theories used to explain persistent observed occupational disparities between various social groups

A simple test for GARCH against a stochastic volatility

The GARCH model and the Stochastic Volatility [SV] model are competing but non-nested models to describe unobserved volatility in asset returns. We propose a GARCH model with an additional error term, which can capture SV model properties, and which can be used to test GARCH against SV. We discuss model representation, parameter estimation and a simple test for model selection. Furthermore, we derive the theoretical moments and the autocorrelation function of our new model. We illustrate its merits for 9 daily stock return series

Economics: An Emerging Small World?

This paper examines the small world hypothesis. The first part of the paper presents empirical evidence on the evolution of a particular world: the world of journal publishing economists during the period 1970-2000. We find that in the 1970's the world of economics was a collection of islands. Two decades later, in the 1990's the world of economics was much more integrated, with the largest island covering close to half of the population. At the same time, the distance between individuals on the largest island had fallen significantly. Thus we believe that economics is an emerging small world. An exploration of the micro aspects of the network yields three findings: one, the average number of co-authors is very small but increasing; two, the distribution of co-authors is very unequal; and three, there exist a number of `stars', individuals who have a large number of co-authors. Thus the economics world is a set of inter-connected stars. We take the view that individuals decide on whether to work alone or with others; this means that individual incentives should help us understand why the economics world has the structure it does. The second part of the paper develops a simple theoretical model of co-authorship. The main finding of the model is that in the presence of productivity differentials and a shortage of high productivity individuals, inter-connected stars will arise naturally in equilibrium

Modeling and forecasting outliers and level shifts in absolute returns

Due to high and low volatility periods, time series of absolute returns experience temporary level shifts (that is, periods with outliers) which differ in length and size. In this paper we put forward a new model which can describe and forecast the location and size of such level shifts. Our so called Switching Regime Censored Latent Effects Autoregression [SR-CLEAR] assumes that technical trading rules may have explanatory value for future volatility. It is assumed that these rules have a time-varying effect on absolute returns, and that this effect appears as an outlier or a level shift. We apply the SR-CLEAR model to nine stock markets and we document its excellent fit and competitive forecasting ability

Rare and low-frequency coding variants alter human adult height

Height is a highly heritable, classic polygenic trait with approximately 700 common associated variants identified through genome-wide association studies so far. Here, we report 83 height-associated coding variants with lower minor-allele frequencies (in the range of 0.1-4.8%) and effects of up to 2 centimetres per allele (such as those in IHH, STC2, AR and CRISPLD2), greater than ten times the average effect of common variants. In functional follow-up studies, rare height-increasing alleles of STC2 (giving an increase of 1-2 centimetres per allele) compromised proteolytic inhibition of PAPP-A and increased cleavage of