Stable and efficient bargaining networks

Abstract. We examine a bargaining game among players connected by a network, where successively potential partners negotiate over terms of a project. For any network structure and ordering of selection of bargaining partners, there is a unique subgame perfect equilibrium outcome which coincides with the standard Rubinstein split. Based on this, we derive expected payoffs for players as a function of the network. We the characterize the pairwise stable and efficient bargaining networks. These two sets do not always coincide and in many situations pairwise stable networks are over-connected. Received: 10 April 2001 / Accepted: 17 January 2002 I am indebted to Matthew Jackson for suggesting this paper. I also thank Bernard Caillaud, Sanjeev Goyal, and the seminar participants at Universidad de Alicante, Universidad Carlos III de Madrid, CEMFI (Madrid), Universitat Autònoma de Barcelona, Erasmus University of Rotterdam, Universitat Pompeu Fabra (Barcelona) and CERAS (Paris) for helpful comments. This paper was written while at Universitat Pompeu Fabra and CERAS. Financial support from the Spanish Ministry of Education through research grant DGESIC PB96-0302, and from the Ecole Nationale des Ponts et Chaussées, Paris is gratefully acknowledged. All errors are of course mine.     

Interlocking directorates in Italy: persistent links in network dynamics

In this work we study the time evolution of interlocking directorates in Italy from 1998 to 2011 by means of dynamical networks. Our purpose is to assess if in Italy there is a connected and stable structure, due to the presence of directors with multiple mandates, like it happens in the German case. We find a very cohesive network structure, due to the presence of a few directors with multiple assignments and, unlike the German case, this structure is stable, but not connected. Moreover we propose an alternative approach to investigate the dynamics, based on temporal networks, in order to quantify the variation of links in a certain time period. We construct a unique cumulative network, where nodes are companies and the existence of an edge is related with the persistence in time of an interlock between two companies. This persistence is due on the one hand to the ownership of a few family firms, and on the other hand to cross-shareholdings between companies. To complete the analysis we also investigate whether the link stability results from the appointments of the same director or from the stepping in/out of different directors.     

A nonlinear simultaneous probit-model for the investigation of decision-making processes: modelling the process of setting up a family in partnerships

This article proposes an approach for modelling the interactive influences of two (or more) actors in decision-making processes. We use a nonlinear simultaneous probit-model and show how the problem of identification for estimating the relative effects of the actors can be solved. The formal model will be applied to examine the decision-making process for setting up a family in partnerships. We model a trivariate distribution consisting of the wifes’ desire to have a child or disposition toward the generative decision, the husbands’ disposition and the joint generative decision. We show how the parameter can be used to assess the relative importance of both partners’ dispositions for the decision, the reciprocal influence of both partners’ dispositions within the interaction process, and the relevance of both partners’ biographical contexts in relation to their own disposition as well as to that of the partner. The analysis is based on a three-stage estimation strategy which is implemented in MECOSA 3 and we use data from the Bamberger married couple panel.     

Cooperation through imitation and exclusion in networks

We study the coevolution of networks and action choices in a Prisoners' Dilemma. Agents in our model learn about both action choices and choices of interaction partners (links) by imitating successful behavior of others. The resulting dynamics yields outcomes where both cooperators and defectors coexist under a wide range of parameters. Two scenarios can arise. Either there is “full separation” of defectors and cooperators, i.e. they are found in two different, disconnected components. Or there is “marginalization” of defectors, i.e. connected networks emerge with a center of cooperators and a periphery of defectors.     

External stakeholder engagement: Complementary and substitutive effects on firms' eco-innovation

In this paper, we investigate whether firms' engagements in collaboration agreements with different types of external stakeholders produce complementary effects on the likelihood of eco-innovation. Although collaboration network and open eco-innovation theories affirm that the combination of external partners such as scientific partners, suppliers and customers produces complementary effects on the firm's likelihood of eco-innovation, several empirical studies found the existence of substitutive effects between them. To bridge this gap in the literature, we shape the nature of the interaction between different external partners, analysing an unbalanced panel sample of 10,918 innovative Spanish firms, covering the period 2008–2016. Consequently, we can show how firms benefit the most from collaboration with external partners. Our results show that firms that simultaneously collaborate with scientific partners, suppliers and customers generate partial complementary effects, which increase the firm's likelihood to eco-innovate the most, and that the combination of customer-collaboration with scientific partners, or supplier-collaboration, produces partial substitutive effects. Taking this in account, our results also confirm that engaging with scientific partners, suppliers or customers, independent of one another, increases firms' likelihood of eco-innovation more than noncollaboration. These results have important implications for managers, researchers and policy designers. For managers, this study provides a correct understanding of the benefits that they can expect to obtain from multi-partner external collaboration. For researchers, it introduces the marginal analysis to estimate interaction on nonlinear models. Finally, for policy designers, it shows the need for sponsored R&D collaboration to encourage coordinated ecosystems in which sustainability goals are pursued together.     

Contests over joint production on networks

We consider a network of heterogeneous agents where each edge represents a two‐player contest between the respective nodes. In these bilateral contests, agents compete over an endogenous prize jointly produced using their own contest efforts. We provide a necessary and sufficient condition for the existence of Nash equilibrium and characterize the equilibrium total effort for every agent. Our model has insightful results regarding the network type, that is, depending on whether the network is bipartite or nonbipartite. Finally, considering the sum of all expected utilities as an efficiency notion, we investigate the optimal network structure.     

试论农产品物流组织网络构建——以山东省为例

文章主要关注的是农产品物流组织网络构建的问题,以山东省为例在宏观层面以城市为对象分析比较各城市农产品物流综合水平,选择确定合理的物流结点建设物流园区;微观层面建立各物流主体的联系,形成不同的微观物流主体运作模式．使各模式与各级物流结点相配合,构成一个整体协调高效的农产品物流组织网络。     

Optimal mechanism for land acquisition

Review of Economic Design - Sellers with one unit of land each are located at the nodes of a graph. Two sellers are contiguous if they are connected by an edge in the graph. The buyer realizes a...     

Matching, search and intermediation with two-sided heterogeneity

This paper analyzes the role played by intermediation in a decentralized market, where trade is carried out through bilateral bargaining, and where the bargaining outcome depends on the process of search for suitable trading partners. To this purpose, a monopolistic intermediary is embedded in a dynamic model of random-matching and two-sided search with heterogeneous agents. It is shown that intermediation might speed up the matching process and might induce separation of the agents’ types, thus enhancing sorting efficiency with respect to a pure search market, where sorting externalities cause multiplicity of equilibria to arise and determine inefficient matching outcomes. Nonetheless, intermediation might also introduce frictions that do not exist in a decentralized market operating in isolation, and this impairs efficiency.      

Coordination Networks Within and Across Organizations: A Multi‐level Framework*

ABSTRACT There are important organizational phenomena that cannot be fruitfully examined without crossing levels of analysis, as others have shown. We argue that coordination of patient care in the current institutional environment is one such phenomenon. As organizations vertically disintegrate and outsource services that were once produced internally, coordination with external organizations becomes increasingly important for achieving desired performance outcomes. We describe the efforts of one hospital to extend the intra‐organizational coordination of patient care to encompass coordination with its external partners. The organization design and network perspectives are both conducive to spanning multiple levels of analysis. We show that the two perspectives together serve as a useful vehicle for developing a framework that links intra‐ and inter‐organizational coordination.     

Inefficiency of sponsored research

I consider two models of sponsored research — one is the model where researchers get funded until (if ever) a research project experiences the first failure (bad news model), the other one is the model where the winner (if any) of a research race is rewarded (good news model). In either case, the researchers start working on a project of unknown quality. The quality of the project is identified with its ability to generate failures or successes, in the first and second models, respectively. The rate of arrival of success conditioned on the quality of the project is an increasing function of the total time spent on research. I find equilibria in both models and show that in case of two competing researchers, one of the researchers experiments inefficiently long, in the bad news model or in the good news model when either the winner takes all, or the laggard is punished. In the good news model where the laggard is rewarded, the equilibrium outcome is efficient.     

The use of monthly and quarterly data in an ARMA model

This paper deals with specification, prediction and length of interval between the observations in an ARMA model. An AR(1) model is found to be suitable for a specific monthly time series. From this series we construct two types of quarterly series and derive the corresponding ARMA models. The theoretical parameter values of the quarterly models, given the monthly model, are compared with the values found empirically when no monthly series exists. By using the variance of the predictor error, we assess the performance of all specifications in predicting up to one year ahead. We show that while the monthly model performs best in theory, the values computed directly from the estimates prove in our empirical example the quarterly models to be preferable in most cases where we are to predict more than one quarter ahead.     

Interactions between work and identities: Thriving,withering, or redefining the self?

Interactions between work and identities are an important topic as a result of their influence on both employees' well-being and organizational performance. However, there is a lack of theorizing that comprehensively charts the processes and outcomes of work and identity interactions. In this paper, we formulate an integrated conceptual model of interactions between work and identities, employee reactions to them, and subsequent outcomes. In our model, we bring together well-known and under-examined aspects of work and identity interactions. The model explains how such varied outcomes as employee thriving and withering, and both subjugated and empowered identities derive from encounters between work and identities. The model makes it possible to assess the possible benefits and side-effects of human resource management practices that seek to align work with the worker, and supports human resource managers in distinguishing the positive potential in situations where employees find their work misaligning with their identities.     

Risky Businesses? Young People in Informal Self‐Employment in Sofia

This article studies how perceptions of the risks associated with informal self‐employment depend on the interplay between the institutional, structural (network) and cultural embeddedness of economic action. Informal self‐employment should create at least three types of risk. The first concerns the possible legal and social sanctions that stem from the illegal character of the entrepreneurial action. The second is related to the complete lack of social security protection among those for whom informal self‐employment is their sole employment. The third is connected with the lack of guarantees concerning contract enforcement, which may increase the probability of opportunistic behaviour by business partners and clients. On the basis of a qualitative study of young, highly educated, informally self‐employed workers in Bulgaria's capital Sofia, I argue that these risks are compensated by the specific network and cultural embeddedness of the economic action. This compensation takes the form of various types of insurance against risks. Its core is the replacement of the vacuum of institutional‐system trust with interpersonal trust. Thus, the specific constellation of institutional, network and cultural embeddedness is able to solve the problem of opportunism, as well as to create the perception that the informally self‐employed are faced with not much greater risks than registered self‐employed workers.     

Work motivation and social communication among public managers

This article tests hypotheses about the effects of two types of work motivation (i.e. intrinsic motivation and extrinsic motivation) and four types of social communication on three important work dispositions (i.e. job involvement, red tape, and perceived organizational effectiveness) among 790 managers employed in public agencies in the states of Illinois and Georgia. The results show that intrinsic motivation is significantly associated with public managers' job involvement, perceptions of red tape, and organizational effectiveness. Also, certain types of organizational communication and mentoring socialization are closely related to the outcomes. The results of cross-interaction effects between motivation and communications on outcome variables support the SDT prediction that when public managers are more involved with different types of social communication behaviors, the relationship between extrinsic motivation and three outcome variables becomes more pronounced. That is, communication in public agencies provides more autonomy and discretion for extrinsically motivated public managers, thus leading to more positive organizational dispositions.     

Modeling node heterogeneity in latent space models for multidimensional networks

Multidimensional network data can have different levels of complexity, as nodes may be characterized by heterogeneous individual-specific features, which may vary across the networks. This article introduces a class of models for multidimensional network data, where different levels of heterogeneity within and between networks can be considered. The proposed framework is developed in the family of latent space models, and it aims to distinguish symmetric relations between the nodes and node-specific features. Model parameters are estimated via a Markov Chain Monte Carlo algorithm. Simulated data and an application to a real example, on fruits import/export data, are used to illustrate and comment on the performance of the proposed models.     

Transaction organizations and transaction cost analysis: A theoretical investigation of the domain-expansion decisions of firms employing a mediating technology

We use the theory of network externalities in applying transaction cost economics (TCE) to inter-mediator transactions. We propose network specificity as an additional form of asset specificity associated with such transactions. Specifically, we identify and analyze two integration decisions that are distinctive to mediators and that both depend on network specificity: the network integration of nodes and the vertical integration of complement exchange activities. We derive some implications of this for managerial practice, public policy and further research.     

Venture capital firms’ lead orientation,network position,and selection of familiar syndicate partners

This study explores how a venture capital (VC) firm’s lead orientation (i.e., acting more as a lead investor rather than a follower investor in past syndication investments) influences its selection of familiar syndicate partners. By conducting empirical research that uses detailed information of 11,219 investment deals in China from January 1999 to June 2016, we find that a VC firm’s lead orientation has an inverted U-shaped relationship with its propensity to select familiar syndicate partners. In other words, as a VC firm’s lead orientation increases, its familiarity degree with the partners in the subsequent syndicated investment will first increase and then decrease. In addition, a VC firm’s network centrality and network constraint imposed by the VC network structure both weakens the inverted U-shaped relationship between its lead orientation and the selection of familiar partners. Robustness checks with different measures and samples, together with the instrumental variable approach and the Heckman selection model that address potential endogeneity problems, show the reliability of our findings.     

The distortion of information to support an emerging evaluation of risk

A persistent problem in the assessment of the risk of an event is a bias driven by the desirability of different outcomes. However, such a desirability bias should not occur in the absence of prior dispositions toward those outcomes. This assumption is tested in an experiment designed to track the evaluation of information during an emerging evaluation of risk. Results confirm the presence of a substantial desirability bias even when there is no prior disposition toward any outcome. These findings bear implications for the assessment of risk not only in the presence of prior desirability, but also in situations currently considered benign.