Course

Economics and Management of Network Businesses and Markets (Not Offered in 2023-24))

Teacher(s)

Thomas de Graaff, Eric Pels, Michael König
Research field

Operations Analytics
Dates

Period 3 - Jan 08, 2024 to Mar 01, 2024

Course type

Field
Program year

Second
Credits

3

Course description

External participants are invited to register for this course. (PhD) students register here, others register here. More information on course registration and course fees can be found here.

This course addresses the analysis and management of network businesses and markets from the perspective of firms and society. The course centers around the theme of networks in business and economics. We will discuss physical networks, such as those arise in transport, and non-physical networks, including internet-based platforms. We will address, from the business perspective as well as the societal viewpoint, phenomena such as network design, market power, congestion, economies of density, market failure, alliances, spill-overs, equilibrium versus optimum, dynamics, nodes, gravity and agglomeration. We will discuss theory and empirics, presenting methodologies to study and analyse network (behaviour) from both perspectives.

The main topics that will be addressed are:

Network characteristics and spill-overs
Complements versus substitutes and its implications
Market power and networks
Ownership of (physical) infrastructure (in relation to complements/substitute)
Econometric of interactions (including reflection problem)—sorting model or spatial econometrics
Modelling and estimation of dyadic networks (gravity and spatial interaction models).

Course literature

The following list of mandatory readings (presented in alphabetical order) are considered essential for your learning experience, for the preparation of the tutorials and for writing your research paper. Changes in the reading list will be communicated on Canvas.

Selected papers, including:

Anderson, James E., and Eric Van Wincoop. 'Gravity with gravitas: a solution to the border puzzle.' American economic review 93.1 (2003): 170-192.
Bernasco, Wim, et al. 'Social interactions and crime revisited: An investigation using individual offender data in Dutch neighborhoods.' Review of Economics and Statistics 99.4 (2017): 622-636.
Bimpikis, K., Ehsani, S. and Ilkılıç, R., 2019. 'Cournot competition in networked markets.' Management Science.
Bramoullé, Yann, Habiba Djebbari, and Bernard Fortin. 'Identification of peer effects through social networks.' Journal of econometrics 150.1 (2009): 41-55.
Bramoullé, Y. and Kranton, R., 2018. 'Games played on networks.' Bramoullé, Y., Galeotti, A. and Rogers, B. eds., 2016. The Oxford handbook of the economics of networks. Oxford University Press.
Economides, Nicholas, and Steven C. Salop. 'Competition and Integration among Complements, and Network Market Structure.' Journal of Industrial Economics 40.1 (1992): 105-23.
Economides, Nicholas. 'The economics of networks.' International journal of industrial organization 14.6 (1996): 673-699.
Fageda, Xavier, and Ricardo Flores-Fillol. 'How do airlines react to airport congestion? The role of networks.' Regional Science and Urban Economics 56 (2016): 73-81.
Graham, Bryan S. 'Methods of identification in social networks.' Annu. Rev. Econ. 7.1 (2015): 465-485.
Jackson, M.O. and Zenou, Y., 2015. 'Games on networks.' In Handbook of game theory with economic applications (Vol. 4, pp. 95-163). Elsevier.
König, M.D., Liu, X. and Zenou, Y., 2014. 'R&D networks: Theory, empirics and policy implications.' Review of Economics and Statistics.