Essays on Economic Networks

Essays on Economic Networks

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In the first Essay, we present a model in which buyers and sellers use links to trade with each other. Each seller produces a good which can be one of two types. Buyers are ex ante identical but receive specification or valuation shocks after the links are formed. We show that efficient networks are stable and that severing a link in an efficient network results in a higher price for the buyer but a lower price for the seller. We also examine network intermediation when sellers (buyers) form links sequentially. When sellers form links sequentially, the first seller becomes an intermediary and shares links with other sellers; this makes all sellers better off. However, when buyers form links sequentially, buyers may or may not share links. If links are shared multiple intermediaries result. Second essay studies the social networks of economic publishing. We focus on connections between the editors of the journal and the authors of the paper. The links between authors and editors are defined based on their institutional ties. We provide a model in which non-linked authors do not have access to the exact quality standards at the journal as opposed to the linked authors who have such information. We show how such asymmetry coupled with measurement errors associated with quality leads to fewer low quality papers published by the linked authors. We support this finding empirically using data from ten top economic journals. We also show that if links are classified using the identity of nodes such as authors being students or faculty members in an institution then there are significant variations among journals with regard to the information dissemination through different types of links. In the third essay, we present a model in which agents use links to trade with each other. We divide the agents into two categories stayers and travellers. Stayers cannot travel whereas travellers can travel to the stayers to exchange. There are three types of goods. Stayers are subject to endowment shock which determines the type of one indivisible unit of the good is determined. Travellers are subject to preference shock wherein the type of good they prefer for consumption is determined. Travellers cannot travel to the stayer unless they have a prior link. In such environment, we determine the optimum travel patterns in a complete network and show that the set of possible Nash equilibria support both Walrasian exchange and commodity money for shocks which do not support double coincidence of wants. We also show the efficient link patterns which support optimum travel strategies and determine the stability of such link patterns.The data on authorsa#39; Ph.D. granting institution as well as the year the degree is awarded comes from the individual websites of the authors and the ProQuest database. The data on citations comes from the Social Sciences Citations Index.

Title:Essays on Economic Networks
Publisher:ProQuest - 2008


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