The Economics of Networks: Interaction and Behaviours

The economic concept of networks refers to the structure of agents` interaction as well as to the economic property of positive externalities. This book describes the economics of networks from various perspectives among which are classical approaches, methods derived from physics, theory of evolutionary games, and experimental economics. These different views shed a new light on the behaviour and interaction of economic agents, on networks and on related phenomena: e.g., emergence of stable macro structures from micro interactions, standardisation, diffusion, preservation of diversity, role of heterogeneity, local learning, surplus creation and surplus allocation. The book presents the state of the art and offers a unique opportunity to understand specific networks phenomena through different theoretical and experimental approaches.

By Gisele Umbhauer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Part I: Interaction and Macro-Struture: an Overview Economies with Interacting Agents By Alan P. Kinnan (GREQUAM) . . . . . . . -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Spatial Interactions in Dynamic Decentralised Economies: a Review By Giorgio Fagiolo (EUI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Network, Interactions between Economic Agents and Irreversibilities: the Case of the Choice among Competing Technologies By Patrick Cohendet (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Rationality and Heterogeneity in Stochastic Aggregation Models By Jean-Michel Dalle (IEPE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Part II: Local Interaction, Learning and Diversity Networks Competition under Local Interaction and Behavioral Learning By Nicolas Jonard (BETA), Patrick Llerena (BETA) and Babak Mehm- pazir (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Can Neighborhood Protect Diversity By Gisele Umbhauer (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Interaction of Local Interactions: Localized Learning and Network Exter- nalities By Nicolas Jonard (BETA) and Murat ytldlZoglu(BETA) . . . . . . . . . . . . 189 viii List of Contribution Evolution of Cooperation with Local Interactions and Imitation By Vanessa Oltra (BETA) and Eric Schenk (BETA) . . . . . . . . . . . . . . . . . . 205 On the Frontier: Structural Effects in a Diffusion Model based on Influence Matrixes By Alexandre Steyer (REC) and Jean-Benoit Zimmermann (GREQUAM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Part III: Behaviors, Externalities and the Emergence of Networks Networks, Specialization and Trust By Ehud Zuscovitch (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 Network Externalities, Cost FUnctions and Standardization By Hubert Stahn (BETA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 The Emergence of Network Organizations in Processes of Technological Choice: a Viability Approach By Jean-Pierre Aubin (IIASA) and Dominique Foray (IRIS-TS) . . . . . . 283 Are more Informed Agents able to shatter Information Cascades in the Lab? By Marc Willinger (BETA) and Anthony Ziegelmeyer (BETA) . . . . . . .

G. Umbhauer: Introduction.- Interaction and Macro-Structure: an Overview: A. Kirman: Economies with Interacting Agents.- G. Fagiolo: Spatial Interactions in Dynamic Decentralised Economies: a Review.- P. Cohendet: Network, Interactions between Economic Agents and Irreversibilities: the Case of the Choice among Competing Technologies.- J.-M. Dalle: Rationality and Heterogeneity in Stochastic Aggregation Models.- Local Interaction, Learning and Diversity: N. Jonard, P. Llerena, B. Mehmanpazir: Networks Competition under Local Interaction and Behavioral Learning.- G. Umbhauer: Can Neighborhood Protect Diversity.- N. Jonard, M. Yildizoglu: Interaction of Local Interactions: Localized Learning and Network Externalities.- V. Oltra, E. Schenk: Evolution of Cooperation with Local Interactions and Imitation.- A. Steyer, J.-B. Zimmermann: On the Frontier: Structural Effects in a Diffusion Model based on Influence Matrixes.- Behaviors, Externalities and the Emergence of Networks: E. Zuscovitch: Networks, Specialization and Trust.- H. Stahn: Network Externalities, Cost Functions and Standardization.- J.-P. Aubin, D. Foray: The Emergence of Network Organizations in Processes of Technological Choice: a Viability Approach.- M. Willinger, A. Ziegelmeyer: Are more Informed Agents able to Shatter Information Cascades in the Lab?.- K. Bounmy, J.-C. Vergnaud, M. Willinger, A. Ziegelmeyer: Information Externalities and Learning with Sequential Interactions.- A. Orlean: The Evolution of Imitation.