Although both betweenness and closeness centrality are claimed to be important for the effectiveness of someone's network position, it has not been explicitly studied which networks emerge if actors follow incentives for these two positional advantages. We propose such a model and observe that...

This paper studies whether structural properties of friendship networks affect individual outcomes in education. We first develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to her Katz-Bonacich centrality measure. This...

Ostrovsky [10] develops a theory of stability for a model of matching in exogenously given networks. For this model a generalization of pairwise stability, chain stability, can always be satisfied as long as agents’ preferences satisfy same side substitutability and cross side complementarity....

We analyze the determinants of environmental policy when two firms engage in two types of lobbying against a restriction on allowed pollution: General lobbying increases the total amount of allowed pollution, which is beneficial for both firms. Private lobbying increases the individual pollution...

While much empirical research has been done on the labour market consequences of unemployment benefits, there is remarkably little evidence on the forces determining benefits. The paper presents a simple model where workers desire insurance against the possibility of unemployment and...

This paper uses a large cross-country survey of business firms to assess their influence on government policies. It is found that influence is associated with larger, government-owned firms that have a high degree of ownership concentration. In contrast, foreign ownership matters little. It is...

How can we overcome the existing political, economic, and ecological crises that humanity faces? With the notion of the commons, Lukas Peter argues that this form of social organization can provide answers to the shortcomings of centralized states and open and competitive markets. By building on...

We present a model of central bank collateralized lending to study the optimal choice of the haircut policy. We show that a lending facility provides a bundle of two types of insurance: insurance against liquidity risk as well as insurance against downside risk of the collateral. Setting a...

The authors examine the effect of a trade-off between shared credit risk and liquidity efficiency, among participants in Tranche 2 of the Large Value Transfer System (LVTS T2), on their decisions to leave open, or close, their bilateral credit limits (BCLs) to a participant at risk of imminent...