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Intermediation in Network Economics: Theory and Applications.

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Title:Intermediation in Network Economics: Theory and Applications.
Authors:Han, Lining
Contributors:Economics (department)
Financial Networks
Date Issued:Aug 2018
Publisher:University of Hawaiʻi at Mānoa
Abstract:The dissertation represents an attempt to study the role of intermediation in economic networks.
Intermediation is widely observed in a variety of markets such as agriculture, transport, communication,
international trade, and finance. Examples of intermediaries on networks include the
traders in over the counter markets and dealers in artwork markets connecting buyers to sellers,
not-for-profit associations connecting donors to recipients, and banks connecting lenders to borrowers.
Such intermediaries often bring new trading opportunities between disconnected agents,
potentially making markets more efficient than without intermediation. However, such intermediation
may come at a cost that may include the intermediaries charging for their connecting abilities
or the spreading of risks to other intermediaries and the whole system.
The main work includes three chapters that theoretically and empirically study the implications of
intermediation in a variety of markets, such as the transmission of resources through networks and
volatility spillover in the financial market. For markets of resource transmission, it studies equilibrium
prices that intermediaries charge for the use of their connecting abilities, and conditions in
the connecting abilities under which the cost of intermediation can be minimized. Such analysis is
done in the complete and incomplete information setting with respect to the connecting abilities of
intermediaries. The theoretical models illustrate how the network structure, the connecting abilities
of intermediaries and information shape the outcomes of pricing mechanism in markets. This
dissertation also provides an empirical study about how risk is spread in financial networks, especially
for industry portfolios in the stock market. It shows that the network of industry portfolios’
volatility evolves over time, and the financial industry is the main risk sender during the financial
crisis of 2007 to 2009.
Description:Ph.D. Thesis. University of Hawaiʻi at Mānoa 2018.
Rights:All UHM dissertations and theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission from the copyright owner.
Appears in Collections: Ph.D. - Economics

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